Nhrd Apr 2009

Leadership

The National HRD Network, established in 1985, is an association of professionals committed to promoting the HRD movement in India and enhancing the capability of human resource professionals, enabling them to make an impactful contribution in enhancing competitiveness and creating value for society. Towards this end, the National HRD Network is committed to the development of human resources through education, training, research and experience sharing. The network is managed by HR professionals in an honorary capacity, stemming from their interest in contributing to the HR profession.

NHRD Network Journal

National HRD Network

ISSN - 0974 - 1739

NHRD Network Journal April 2009

Leadership

The underlying philosophy of the NHRDN is that every human being has the potential for remarkable achievement. HRD is a process by which employees in organizations are enabled to:

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acquire capabilities to perform various tasks associated with their present and future roles;

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develop their inner potential for self and organizational growth,

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develop an organizational culture where networking relationships, teamwork and collaboration among different units is strong, contributing to organizational growth and individual well-being.

April 2009

www.nationalhrd.org

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Volume 2

Issue 2

John Adair Arvind Agrawal Stewart D. Friedman Paul Hersey N.S. Rajan Dave Ulrich and Norm Smallwood Gary Yukl and Rubina Mahsud Anu Aga Sandeep Bakhshi Jaspal Bindra Peter Capelli et al Jim Collins B. Santhanam Vijay Bharadwaj Aquil Busrai Rajeev Dubey P. Dwarakanath Adil Malia Anand Nayak and L. Prabhakar Vivek Patwardhan Satish Pradhan Sanjeev Sahi T.T. Srinath Inder Walia

A quarterly Publication by The National HRD Network

www.nationalhrd.org

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ABOUT THE JOURNAL NHRD Network Journal Leadership Volume 2

Issue 2

April 2009

NHRD Network Board Members

The National HRD Network publishes a semi-academic quarterly journal-each issue dedicated to a theme. Publications so far include on the themes “IT in HR”, ”Performance Management”, “Attracting and Retaining Talent”, “Career Management”, “Organizational Change”, “Global HRM”, “Women in Corporate Leadership Roles”, “Organization Development” and “Learning and Development”. The current issue is on the theme of “Leadership” The plan for the ensuing issues is as follows:

National President:

Aquil Busrai, ED-HR, IBM India Limited,

Past National Presidents:

Dwarakanath P, Director-Group Human Capital, Max India

Date of Publication

Theme

Guest Editor

Dr. Santrupt Misra, Director Aditya Birla Group

July 2009

Work-Life Balance

Dr. C.S. Venkataratnam

Oct. 2009

Institution Building

Mr. S. Varadarajan

Jan. 2010

“HR for, and of Gen Next” — Leveraging Demographic Dividend

Dr. S. Chandrasekhar

Regional Presidents: East:

Prof. Madhukar Shukla, XLRI, Jamshedpur

South:

Gopalakrishna M, Director Incharge, A.P. Gas Power Corporation Ltd.

West:

Satish Pradhan, Executive VP Group HR, Tata Sons

The journal publishes primarily three categories of articles:

North:

NS Rajan, Partner, Human Capital and Global Leader – HR Advisory, Ernst & Young

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Conceptual and research based

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Contributions from thought leaders including a limited number of reprints with due permission

National Secretary:

Dr. P VR Murthy, CEO, Exclusive Search Recruitment Consultants

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Organizational experiences in HR interventions/mechanisms

National Treasurer:

Ashok Reddy B, VP-HR, Info Tech Enterprises

Executive Directors:

Satyanarayana K (Hon.) Mohit Gandhi

Editorial Board

NS Rajan, Partner, Human Capital and Global Leader – HR Advisory, Ernst & Young, [email protected] (Guest Editor for this issue) Dr. PVR Murthy, Managing Editor, CEO, Exclusive Search Recruitment Consultants, [email protected] Aquil Busrai, Executive Director, Human Resources, IBM India Limited, [email protected] Dr. Pallab Bandyopadhyay, VP-HR-Asia Pacific, Perot Systems, [email protected]

Publisher, Printer, Owner and Place of Publication

Satyanarayna K, Hon. Executive Director, National HRD Network on behalf of National HRD Network, 506, Sai Siri Sampada, 7-1-29/23 & 24, Leela Nagar, Ameer Pet, Hyderabad 500 016. Tel: +91 (40) 2374-2429 [email protected]

Printed at

Nagaraj & Co. Pvt. Ltd., 156, Developed Plots Industrial Estate, Perungudi, Chennai 600 096. Tel : 044 - 66149291

The views expressed by the authors are of their Copyright of the NHRD Journal, all rights reserved. own and not necessarily of the editors nor of the Contents may not be copied, emailed or reproduced without copyright holders’ express permission in writing. publisher nor of authors’ organizations

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Editorial Board Members : Dr. P.V.R. Murthy, Managing Editor is a product of I.I.T., Kharagpur and IIM, Calcutta with close to thirty years experience in H.R. field. He is founder and runs an executive search firm Exclusive Search Recruitment Consultants. He is associated with a number of academic institutions. He is trained in TQM in Japan and in human processes from ISABS and NTL, U.S.A., He is the National Secretary of National HRD Network. Aquil Busrai is Executive Director Human Resources with IBM India. He has over 36 years HR experience, both in strategic and operational HR with blue chip organisations like Unilever in Kenya and India, Motorola in Asia Pacific and Shell in Malaysia. He is the National President for National HRD Network. Dr. Pallab Bandyopadhyay is the Vice President & Head, Human Resources - Asia Pacific, Perot Systems. A doctoral fellow from XLRI and AHRD. He is trained in OD and Human Processes from NTL, USA, he believes in applying HR concepts to practice to make it more meaningful and effective. He is a mentor and coach to many young HR professionals. NHRD firmly believes in and respects IPR and we appeal to the contributors to strictly honour the same.

For any further clarifications, please Contact : The Managing Editor Dr. P V R Murthy, CEO, Exclusive Search Recruitment Consultants, #8, Janaki Avenue, Off 4th Street, Abhiramapuram, Chennai 600 018. [email protected]

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CONTENTS S.No.

Title of Article

Author

Page No.

THE MASTERS 1

Functional Leadership

John Adair

2

2

Leadership for Averting Organization Disasters Arvind Agrawal

3

How To Improve Performance In All Parts of Life

Stewart D. Friedman

16

4

Pace, Then Lead

Paul Hersey

22

5

Leadership Theory: In Evolution

NS Rajan

24

6

Our Leadership Journey

Dave Ulrich and Norm Smallwood

33

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Linking Strategic Leadership and Human Resource Management

Gary Yukl and Rubina Mahsud

44

8

THE ARCHITECTS 8

When Does a CEO Become a Leader?

Anu Aga

52

9

Effective Leadership is Driven by Strong Values

Sandeep Bakhshi

57

10 Leadership in Changing Times

Jaspal Bindra

61

11 The DNA of Indian Business Leadership

Peter Capelli, Harbir Singh, 66 Jitendra V Singh and Michael Useem

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The 10 Greatest CEOs of All Time

Jim Collins

72

13

I10 : Framework For Leadership

B Santhanam

80

14 Leadership Development Process in an Organization to Sustain Business Growth and Leadership

Vijay Bharadwaj

88

15 Letter to a Young Professional

Aquil Busrai

94

16 Leadership in Tomorrow’s Company

Rajeev Dubey

96

THE ALCHEMISTS

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S.No.

Title of Article

Author

Page No.

17 Leadership in Perspective

P Dwarakanath

100

18 Corporate “Ubermensch” – A View from Ethereal to the Real…

Adil Malia

106

19 The ITC Leadership Paradigm: Vision, Values & Vitality

Anand Nayak and L Prabhakar

109

20 Dimensions of Leadership

Vivek Patwardhan

116

21 Leadership – The Experience of Those We Choose To Lead

Satish Pradhan

122

22 All Aboard! – The Leadership Journey at HAL

Sanjeev Sahi

126

23 The New Leader: An Emerging Butterfly

T.T.Srinath

132

24 Leadership at Bharti

Inder Walia

136

25 Leadership Brand by Dave Ulrich & Norm Smallwood

C Mahalingam

142

26 Leadership in The Era of Economic Uncertainty by Ram Charan

S Sadasivan

144

27 The Gamechanger: How Every Leader Can Drive Everyday Innovation by A.G.Lafley & Ram Charan

R Shantaram

145

28 Strengths based Leadership by Tom Rath and Bary Conchie

C S Venkata Ratnam

146

Book Reviews

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EDITORIAL COMMENTS

NS Rajan (Guest Editor for this Issue) Rajan is Partner in the Human Capital Practice of Business A d v i s o r y Services and Global Leader HR Advisory in Ernst & Young.

Kenneth Clarke, the eminent art historian, who dedicated a lifetime to the study of civilization, would say that he still did not know what it was but thought he could recognize it when he saw it. Metaphorically, the study of Leadership, both an art and science, could well be described in similar terms. With the advent of industrialization in the nineteenth century, leadership in the world of business assumed renewed significance and drew some of the great minds to unravel our understanding of it with multidisciplinary approaches. The need for, and recognition of leaders has been felt arguably since the beginning of human civilization. This has been felt even more acutely in current times with the turn of events around us throwing up unprecedented challenges. As Napoleon aptly observed, "a leader is a dealer in hope", and the situation today calls for leadership that can convert these adversities into opportunities. It surely is a time to reflect on the first principles of leadership. In such a context, it is indeed a real privilege to bring out this "Leadership" issue of the National HRD Network. This special issue comprises rich contributions from a select list of invitees comprising eminent scholars, exceptional CEOs and custodians of human capital. The authors have blended deep insights, experiential learning and personal discoveries into a powerful amalgam of ideas that serve as a rich vein of knowledge to enhance our understanding of leadership. The issue has been divided into three distinct sections, followed by reviews of books on the theme of leadership. I: THE MASTERS Scholars of eminence who have advanced and expanded our knowledge of leadership through their incisive research, insightful discoveries and practical frameworks have been specially invited to contribute to the journal. Some of them have had schools of leadership named after their thought provoking additions to the science, have been feted for their rich body of work, and recognized by fraternity as leadership gurus. John Adair (renowned for Action Centred Leadership), Stewart D. Friedman (founding director of the Wharton School's leadership program), Paul Hersey (reputed for Situational Leadership), Dave Ulrich & Norm Smallwood (widely known for their hugely popular best selling books on Leadership), Gary Yukl & Rubina Mahsud (Yukl's books on Leadership are text books at business schools) have graciously contributed and enriched the journal. As students of the science of leadership, Arvind Agarwal (RPG Group) and NS Rajan (Ernst & Young) have reviewed leadership literature throwing light on the remarkable journey of leadership thought. II: THE ARCHITECTS Creators par excellence of wealth for stakeholders, visionaries in their own right with entrepreneurial flair, and role models all rolled into one are contributors to this section. It has chief executives offering

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their deep insights on leadership, as they perceive it. They are leaders, who at the helm of their organizations endeavour to create lasting value and shared vision. The buck stops here! Anu Aga (Thermax), Sandeep Bakhshi (ICICI Lombard), Jaspal Bindra (Standard Chartered Bank) and B Santhanam (Saint Gobain) need no introduction, and their articles reflect deep understanding of what it means to lead successfully. Jim Collins (of the classic Built to Last fame) contributed an article he wrote on the ten best CEOs, hugely relevant even today. Peter Capelli, Harbir Singh, Jitendra V Singh, and Michael Useem (of Wharton School) had joined hands with NHRD to unravel the DNA of Indian business leadership, an abstract of which is also featured in this issue. III: THE ALCHEMISTS Custodians of human capital of their organizations, leaders of the critical human resources function, creators of shared vision and alchemists who nurture and develop the latent potential comprise this section of contributors, a veritable galaxy of people who truly matter to people who truly matter. The invitees include some of the finest human resource leaders in the country including Vijay Bharadwaj (Dell), Aquil Busrai (IBM), Rajeev Dubey (Mahindra Group), P Dwarakanath (Max Group), Adil Malia (Essar Group), Anand Nayak & L Prabhakar (ITC), Vivek Patwardhan (Asian Paints), Satish Pradhan (Tata Group), Sanjeev Sahi (Hindustan Aeronautics) , TT Srinath (Pegasus), and Inder Walia (Bharti) who have distilled decades of experiential knowledge into eminently articulated expositions of leadership thought. BOOK REVIEWS CS Venkata Ratnam, C Mahalingam, Shantaram R and S Sadasivan have reviewed the recent books available on leadership. In putting together this special edition on leadership, the journey has been immensely gratifying, and the opportunity to interact with the contributors has been a remarkable source of learning. Hope this endeavour serves the purpose of illuminating the science of leadership thought, and in current times to serve as a beacon for action. I recall the words of William Shakespeare's from Julius Caesar "There is a tide in the affairs of men, which taken at the flood, leads on to fortune". May you find yours.

Dr. PVR Murthy Managing Editor

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Dr. Pallab Bandyopadhyay

Aquil Busrai

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Scholars of eminence who have advanced and expanded our knowledge of leadership through their incisive research, insightful discoveries and practical frameworks have been specially invited to contribute to the journal. Some of them have had schools of leadership named after their thought provoking additions to the science, have been feted for their rich body of work, and recognized by fraternity as leadership gurus. John Adair (renowned for Action Centred Leadership), Stewart D. Friedman (founding director of the Wharton School’s leadership program), Paul Hersey (reputed for Situational Leadership), Dave Ulrich & Norm Smallwood (widely known for their hugely popular best selling books on Leadership), Gary Yukl & Rubina Mahsud (Yukl’s books on Leadership are text books at business schools) have graciously contributed and enriched the journal. As students of the science of leadership, Arvind Agrawal (RPG Group) and NS Rajan (Ernst & Young) have reviewed leadership literature throwing light on the remarkable journey of leadership thought.

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FUNCTIONAL LEADERSHIP JOHN ADAIR Abstract Leadership does not operate in isolation, and in fact is based on continuous interaction with others. This interaction is constitutive of complex coordinates which determines whether the group is able to achieve its objectives or not. This article presents a leadership framework that explains leadership in the context of group situations and details the key functions of leadership. Further, it elaborates upon the key behaviors that are useful in order achieve the desired goals.

About the Author John Adair is one of the world’s leading authorities on leadership and leadership development. John holds the higher degrees of Master of Letters from Oxford University and Doctor of Philosophy from King’s College London, and he is also a Fellow of the Royal Historical Society. In 2009, John was appointed Chair of Leadership Studies United Nations System Staff College in Turin. John has written over 40 books, translated into many languages. Apart from being an author he is also a teacher and consultant. “Leadership is action not passion” - Donald H Mcgannon Leadership and Motivation are like brother and sister. It is difficult to think of a leader who does not motivate others. But leadership embraces more than motivation. What is leadership? The Action-Centered Leadership (ACL) approach offers comprehensive answer to that question. The model encompasses the concept of Individual Needs, which is the area chartered by Maslow and Herzberg. Therefore, it provides a natural context for an exploration of their theories The Background Functional leadership training was first developed at the Royal Military Academy, 2

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Sandhurst as part of a programme introducing young officers to the responsibilities of leadership. When transposed into industry and commerce it was renamed Action-Centered Leadership (ACL). Initially, the core content of ACL remained much the same as the original Sandhurst version, though the practical exercises and case studies were changed. Here, I shall present that framework of that original concept of ACL, and then comment upon its constituent elements. My standard introduction to the ACL model has been to look first at the Qualities Approach and then at the Situational Approach to leadership. Having outlined these approaches or theories, identifying both their drawbacks and their positive

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contributions to our understanding of leadership, I move on to the third ingredient in the story (apart from the personality and character of the leader and the situation in which it was all happening), namely the people concerned. Having mentioned the amount of research done on groups as wholes that are more than the sum of their parts (which led to establishment of the new sub-disciplines of Social Psychology) I explain that I have selected one theory from the mass of research material which I consider to be of most relevance to the practical manager intent upon understanding leadership and motivation – the theory of group needs. To this I add the concept of group personality. This is how I actually explain it. The Theory of Group Personality and Group Needs As a starting point I have developed the idea that working groups resemble individuals in that although they are always unique (each develops its own ‘group personality’) yet they share, as individuals do, certain common ‘needs’. There are three areas of needs present in such groups. Two of these are the properties of the group as a whole, namely the need to accomplish the common tasks and the need to be maintained as a cohesive social unity (which I have called the ‘team

maintenance need’). The third area is constituted by the sum of the individual needs of group members. Individual Needs and Motivation This third area of need present in the corporate life inheres in the individual members rather than in the group itself. To the latter they bring a variety of needs – physical, social, intellectual, and spiritual – which may or may not be met by participating in the activity of the group. Probably physical needs first drew men together in working groups: the primitive hunter could take away from the slain elephant a hunk of meat and a piece of hide for his own family. Nowadays the means for satisfying these basic needs of food, shelter and protection are received in money rather than in kind, but the principle remains the same. There are, however, other needs less tangible or conscious even to their possessors which the social interaction of working together in a group may or may not fulfill. These tend to merge into one another, and they cannot be isolated with any precision, but Figure 1.1 will indicate their character. Drawn from the work of AH Maslow1 it also makes the point that needs are organized on a priority basis. As basic needs become relatively satisfied Self-actualization

Esteem Social Safety Physiological

Security Protection from danger

Belonging Social activities Love

Self respect Status Recognition

Growth Personal development Accomplishment

Hunger Thirst Sleep

Figure 1.1 The priority of needs

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higher needs come to the fore and become motivating influences. These needs spring from the depths of our common life as human beings. They may attract us to, or repel us from any given group. Underlying them all is the fact that people need one another, not just to survive but to achieve and develop personality. This growth occurs in the whole range of social activity – friendship, marriage, neighborhood, but inevitably work groups are extremely important because so many people spend so much of their waking time in them. Professor Fredrick Herzberg has dichotomized the list by suggesting that the factors which make people experience satisfaction in their work situation are not the reverse of those which make them dissatisfied. The latter is caused by deficiencies in the environment or context of the job; in contrast, job rests upon the content of work and the opportunities it presents for achievement, recognition, professional development and personal growth.2

group identity – the ‘we’ feeling, as some have called it. The moment of victory closes the psychological gaps between people: morale rises naturally. Good internal communications and a developed team spirit based upon past successes make a group much more likely to do well in its task area, and incidentally provide a more satisfactory climate for the individual. Lastly, an individual whose needs are recognized and who feels that he or she can make a characteristic and worthwhile contribution both to the task and the group will tend to produce good fruits in both these areas. We can illustrate these interrelations with a simple model:

TASK

TEAM

INDIVIDUAL

The Needs Interact The first major point is that these areas of need influence one another for better or worse. For example, if a group fails in its tasks this will intensify the disintegrative tendencies present in the group and produce diminished satisfaction for its individual members. If there is a lack of unity or harmonious relationships in the group this will affect performance on the job and also individual needs (cf. A H Maslow’s Social Needs). And obviously an individual who feels frustrated and unhappy in a particular work environment will not make his or her maximum contribution to either the common task or to the life of the group. Conversely, achievement in terms of a common aim tends to build a sense of 4

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Figure 1.2 Interaction of needs

If you place a coin over the task circle it will immediately cover segments of the other two circles as well. In other words, lack of task or failure to achieve it will affect both team maintenance e.g. increasing disruptive tendencies, and also the area of individual needs, lowering member satisfaction within the group. Move the coin on to the ‘Team’ circle and again the impact of near-complete lack of relationships in the group on both task and individual needs may be seen at a glance. Conversely, when a group achieves its task the degree of the group cohesiveness and

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enjoyment or membership should go up. Morale, both corporate and individual, will be higher. And if the members of the group happen to get on extremely well and find that they can work closely as a team, this will increase their work performance and also meet some important needs which individuals bring with them into the common life. These three interlocking circles therefore illustrate the general point that each area of need exerts an influence upon the other two: they do not form watertight compartments. Leadership Functions In order for the need for this area to be met in any group or organization certain functions have to be performed. According to this integrated theory, the provision for these necessary functions is the responsibility of leadership. However, not all of them are required all of the time. Therefore you need: 1. Awareness of what is going on in groups (the group process or underlying behavior as well as the tip of the icebergthe actual content of the discussion). 2. Then one needs understanding which means in this context knowing that a particular function is required. 3. You should have the skill to do it well enough to be effective. That can usually be judged by whether or not the group responds or changes course. But are these membership or leadership functions? The orthodox teaching of the group laboratory movement, as we have seen, was somewhat ambiguous on this point. On the whole they were happier talking about leadership rather than

leaders. Leadership resided in the functions not a person. Therefore, the group could share leadership amongst themselves. If a member provided a function, e.g. summarizing which the group accepted, then in that moment it became a leadership function. If the group did not accept, then it remained a membership function. So leadership passed from person to person, like a ball in football match. It is true that some groups might elect leaders, but their role was essentially to be as safety nets, picking up the functions which members failed to provide. As already stated, these assumptions rested in part on value judgments, especially the dislike of any idea of an elite of born leaders exercising power over their fellows. It also reflected the particular situation of the group laboratory: 16 or 18 people, all with equal knowledge or ignorance, plunged into a group with no task but to examine to examine their own lives. Valuable as it was for learning or research ends such groups are rather different from real work groups in industry or any other human enterprise. To begin with, work groups have a more concrete or objective task to perform. Groups which come together to pursue a self chosen task, such as trade unions or sports clubs, tend to elect their own leaders, who are responsible ultimately to the group. Where tasks are given to the group the leader tends to be appointed by a higher authority and sent to it as part of the package deal. In this case, the leader is accountable first to the appointing authority and only secondly, if at all, to the group. He is accountable for all three circles. That does not mean, of course, that the leader is going to provide all the functions needed in the three areas, there are far too many required for any one April | 2009 NHRD Network Journal

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person to do that, especially in larger groups. If he exercises the art of leadership properly, he will generate a sense of responsibility in every one of them so that members naturally want to respond to the three sets of need. But he alone is accountable at the end of the day. It is the leader who should get the sack if the task is not achieved, or the group disintegrates into warring factions, or the individuals’ lapse into sudden apathy. That is why leaders usually get paid more than the group members.

Achieving the Task

Building and Maintaining the Team

Developing the Individual

Figure 1.3 What a leader has to do

Understanding your position as the leader in relation to the three circles is vitally important. You should see yourself as half in half out. There should be some social distance between you and the group, but not too much. The reason for maintaining this element of distance is not to enhance your mystique, but because you may have to take decisions or act toughly in the task area which will cause reactions to be directed at you, from the group and the individuals who face, in consequence, some unwelcome change. You have weakened yourself if you are on too friendly terms; or rather you have exposed yourself to pressures – ‘we didn’t expect this from you’- which you may not be able to handle. There is an especial problem for leaders who are elected or appointed from amongst their workmates and remain with the same group. To exchange the close friendly relationship of collgeues for those of a leader or subordinate is not easy. That has been recognized for many years. When the Roman Army appointed a man to be a centurion (a cross between a company commander and a regimental sergeant

Position of Leader in relation to Group Behavior

Useful

Not Useful

Leader emphasizes distance

Where group knows him well before he became a leader. When group seems to want over-familiarity. When unpopular decisions are in the offing. When taking charge initially of a new group When taking charge initially of a new group

Leader minimizes distance

When there is lack of communication and trust between management and employees Where all are roughly equal in knowledge and experience.

Where group already has a strong traditional sense of distance from its leaders. When people can be fully trusted not to become too familiar anyway Where the distance is already fairly minimal owing to the predecessor’s style. Where it can be misinterpreted as familiarity.

Leader strikes balance between closeness and distance

Most working situations

Where the group needs corrective treatment after either too remote or too friendly leadership.

Figure 1.4 Position of Leader in relation to Group

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major) he was always given a century of 100 men in another legion. The principle is a sound one, and is widely applied in the industry today. You can begin to see why a degree of self sufficiency is important for a leader. Leadership is not about popularity, though it would be inhuman not to enjoy being liked. Because leaders tend to have social, even gregarious natures, they can find the inevitable brickbats that come their way hard to endure. But what matters in the long run is not how many rounds of applause a leader receives but how much respect he gains, and that is never achieved by being ‘soft’ or ‘weak’ in the task, team or individual circles. See Fig 1.4 for some relationships between leader and group. The leader’s social needs can be met partly by relations with his team, but it is always lonely at the top. He can never fully share

the burden with those who work for him, or open his heart about his own doubts, fears and anxieties; that is best done with other leaders of his own level. If the leader’s superior is doing his job he will help to make such meetings possible (they are often called management training courses!) Even more important, the leader’s superior will himself be a resource; a pillar of strength and at times a shoulder to weep upon, should the leader require it. By performing the functions of leadership, the leader guides the group to: • Achieve the Common Task • Work as a Team • Respect and Develop Its Individual Members Until you can do this essential work your appointment as a leader will not be ratified in the heart and minds of the group.

The copyright of this article belongs to its author, Mr. John Adair. The three circles model and the Action Centered Leadership (ACL) in particular is his registered trademark. For more details please visit http://www.johnadair.co.uk/. If any organisation is interested in applying the author’s work to leadership training & development, please get in touch with him through his website.

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LEADERSHIP FOR AVERTING ORGANIZATION DISASTERS ARVIND AGRAWAL Abstract This article distinguishes between the ‘Leader’ as an Individual and ‘Leadership’ as a process. Further, the article explains leadership as a process in the context of the nature of tasks and exchange with subordinates. Both, excessive job demands on the leader and a very personalized relationship with the leader, pose threats for the organization, as the leaders may indulge in ‘impression management’ or ‘hijack’ the organization to meet own agenda. Therefore, appropriate checks and balances need to be built by organizations to avert any crises in future.

About the Author Arvind Agrawal is an IIT Kharagpur and IIM (A) alumnus, majoring in Marketing and Human Resource Development. Since 1999, he is President – Corporate Development and Group HR in the RPG Group. His current responsibilities in RPG comprise HR, TQM and Information Technology. The first 12 years of his working life were spent in the HR function in companies like Escorts and Modi Xerox. On the professional front, Arvind has been active in Management & HR forums in the country. In 1992, he was awarded the National HRD Award.

Organization performance has been the focus of scholars since long. From Fortune 500 list of companies in 1992, only 120 appear in the list of Fortune 500 for the year 2007. That is, over 76% of the Fortune 500 companies disappeared from the list in 15 years, Accenture study (2007). In India, one of the most readily available organized data on performance of the business organizations is published by Economic Times, in terms of ranking of Top 500 companies in India. This is published every year so that the comparison from year to year is possible. For the purpose of this paper, 10 years’ data from the fiscal year 1995 to fiscal year 2005 was taken. These 10 years have been the years of liberalization and growth in Indian 8

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economy, marked with unprecedented and sweeping changes. This has thrown open opportunities in all sectors of economy. Organizations have had wider choices to embrace new technology, launch new products, enter new markets and become global companies. These opportunities have been available to all companies in India. Some of them made full use of these opportunities and grew very rapidly. On the other hand, a large number of companies have not been able to cope with this new liberalized competitive environment. Economic Times ranking of 500 top companies in India shows that 309 out of top 500, i.e. 62% of the companies listed in the fiscal year 1995 are no longer in the Economic Times listing of top 500 companies

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for the fiscal year 2005. Further, 101 out of total 500 companies i.e. 20% of the companies have declined in their ranking from fiscal year 1995 to fiscal year 2005. Only 90 companies, which are 18% of the Top 500 companies, have improved their ranking over the last 10 years. Both Fortune 500 and Economic Times 500 indicate a trend that large number of organizations are not able to sustain their success over a time period of 10 to 15 years. Why does this happen? Does leadership play any role in influencing the company’s performance? Wright Theerathom, Tu, Coilmore and Lado (1992) conclude that the leadership at the top management together with the prevailing organization culture, leading to choice of appropriate strategic option, leading to superior business performance. Ashley and Patel (2003) analyzed the data of Fortune 500 companies during 2001 and 2002. They identified 17 best-performing companies and 17 worst-performing companies in terms of shareholder returns. They found quality of management i.e. the leadership was one of the most significant factors that differentiated the company performances. Strategic choices have large behavioral content in terms of cognitive base and values of the decision makers, Hambrick and Mason (1984). They have established that leaders’ assumption about future events, knowledge of alternatives, consequences and the value system has profound impact on performance of the organizations. According to Day and Lord (1988), leadership can make a difference of as high as 20 to 45% of performance in an organization. Joyce, Nohria and Roberson (2003), reported that leadership accounts for 14% variance in the firm’s performance. They established that leadership biases, experiences and preferences influence strategic choices and company performance.

Further, Hogan and Kaiser (2005), after reviewing the empirical literature on leadership and organization effectiveness, concluded that leadership is the most important factor impacting organization effectiveness. What is leadership which has such an overwhelming impact on organizations. Stogdilll (1974) in the Handbook of Leadership defines leadership as the process of influencing the activities of an organized group in its efforts towards goal setting and goal achievement. The Webster dictionary meaning quoted by Augier and Teece (2005) defines leadership as ‘leading others along a way, guiding’. Javidan and House (2002) in their Global Leadership and Organizational Behavior Effectiveness (GLOBE) study of 62 countries define leadership as the ability to motivate, influence and enable individuals to contribute to the objective of organizations, of which they are members. In this paper, in operational terms, leadership is defined as the process to motivate, influence and enable individuals to meet goals of the organizations, of which they are members. As per this operational definition, leader is not leadership. Leader is an individual and leadership is a process. This paper deals with leadership that is process. Leadership researches also establish that effectiveness of leadership equally depends upon nature of task, (Fiedler, 1967; House, 1971; Hersey and Blanchard, 1969; Sinha, 1990). Whittington, Goodwin and Murray (2004) established that challenging goals enhance the effect of leadership behavior on employee commitment and job performance. However, if the demand on the job becomes excessive, it may provoke the leader to adopt illegitimate means to demonstrate continued good performance. Hambrick, Finkelstein and Mooney (2005) established the effect of executive job demand on the leadership behavior. April | 2009 NHRD Network Journal

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Firstly, Hambrick et al. (2005) identified three major determinants of the executive job demand as task challenge, performance challenge and executive’s own aspirations. Task challenges are the conditions that make the performance of the task difficult, be it external environmental factors or internal factors such as resource scarcity or task complexity. Performance challenges arise due to various stakeholders such as firms’ shareholders, customers, government regulators or employees. Executive aspirations could be arising from one’s own need for achievement, age and tenure. Research done by Hambrick et al (2005) can be best understood by the diagram below: This Fig. 1 shows that leadership is surrounded by job demands arising out of numerous factors. These factors are rising aspiration of customers and shareholders, rapid changes in the environment, shorter product lifecycle, and high incentives. These factors surrounding the top

management team create high pressure on the leadership. Pressure on the job gets further compounded by one’s own as well as the followers’ aspirations. Under such excessive pressures, the leadership often gets tempted to doing impression management or adopting unfair means to achieve the promised high achievement. Extent of job demand hence, is an important contextual variable which moderates leadership behaviour. Excessive monetary reward linked to success, is another variable that moderates leadership behavior. Cannella and Monroe (1997) quoted Fama and Jensen, (1983) confirming that tying managerial remuneration to company performance induces performance orientation. However, when there is use of powerful incentive packages without sufficient institutional checks and balances, then it leads to temptations of cooking the books, Piper (2002). Hambrick et al (2005) conclude that researches have so far not been able to

Fig. 1 : Consequence of Executive Job Demand on Leadership behaviour prepared based on Hambrick et al (2005) Higher Incentive

Task Complexity

Followers’ aspiration

H I G H

Shorter Product Life Cycle

Temptations Rate of change in business environment

Job demands on Leadership

Impression Management Demands

Illegalities

Shareholders’ Pressure

Customers’ aspiration

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Own Personal Aspiration

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G O A L A C H I E V E M E N T S

establish the right level of monetary reward which provides the right level of challenge without tempting the leadership toward engaging in erratic strategic choices, impression management and sometimes even illegalities. During the last decade, there has been increasingly greater focus to introduce and enhance performancebased incentive remuneration to raise the performance orientation in the organizations. If the top management team is put on excessive monetary reward, then the resultant leadership behavior may get moderated to somehow produce organization performance. This tempts the leadership to doing impression management or even adopting unfair means to achieve the targeted high goals. Review of leadership literature also demonstrates that effectiveness of leadership is contingent upon quality of relationship between leader and subordinate, (Fiedler, 1967; Vroom and Yetton, 1973; Liden and Graen, 1980; Basss, 1999; Hersey and Blanchard, 1969; Sinha, 1990; Vaishli and Kumar, 2003). High quality of leader’s relationship with followers leads to mutual trust and consequently increased delegation. Gerstner and Day (1997) mention that LMX (Leader Member Exchange) theory focuses on the dyadic exchange relationships between the leader and the follower. Jenssen and Van Yperen (2004) in their research in a Dutch firm found that high quality exchange relationship consists of

mutual trust, respect and obligation. Wang, Law, Hackett, Wang, and Chen (2005) in People’s Republic of China, observed that transformational leadership behavior positively impacts quality of leadermember exchange, which in turn positively impacts organization citizenship behavior as well as task performance of the subordinates. Brower, Schoorman and Tan (2000) established relationship between trust and leader-member exchange. They concluded that leaders with high mutual trust tend to take higher risk and in turn do higher delegation. Lord and Brown (2001), in their research found that followers’ mental model about themselves and the leader’s, moderates the nature of relationship they will have with the leader and what will be effective leadership behavior, as shown in Fig. 2 as follows. It shows that leader with high quality (HQ) of relationship with followers will be able to influence the follower’s mental model and hence have higher effectiveness. But if the quality of leader-follower relationship is of low quality (LQ), then leader may not be able to influence the follower’s mental model. Hence, leader’s effectiveness will be low. For leadership, this means, if they have high quality of relationship with their followers, then they will be able to influence the actions of the followers, to produce desired organization performance. That is, the quality of leaders relationship with followers impacts the leadership behavior.

Fig. 2: Quality of leader — follower relationship and follower’s mental model Prepared based on Lord & Brown (2001) HQ* L eader L Q*

F ollower’s mental model • •

About thems elves About leaders

High

L ow

L eaders hip E ffec tivenes s (organization performanc e

* HQ – High Quality Leader - follower relationship * LQ – Low Quality Leader - follower relationship April | 2009 NHRD Network Journal

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Howell and Shamir (2005) mention that followers have two distinct types of relationships with their leaders – personalized and socialized with consequences as shown in Fig. 3. The Fig. 3 shows the consequences of the two distinguished types of relationships followers have with their leaders. Followers with personalized relationship have blind faith on their leaders. In this relationship, leader feels empowered. There is danger that leader may hijack the organization towards his own agenda. On the other hand, if followers have socialized relationship with their leaders, then their relationship is for a specific mission. Followers and leaders have constant discussion on ‘means’ and ‘outcomes’. Under this relationship, leader cannot hijack the organization, as he or she will be questioned by the followers. This implies that the nature of relationship between leaders and their followers will influence the organization performance. If the relationship is personalized, then the organization will blindly follow the goals set by the leaders. In such a scenario, the leader can hijack the organization for his own agenda, which may or may not be in organization’s interest. On the other hand,

if the relationship between leaders and their followers is ‘socialized’, there will be constant discussion on ‘goals’ as well as ‘means’ to achieving them. Nature of relationship between leaders and the followers becomes another moderating variable for impact of strategic leadership behavior on organization performance. Any organization that relies on the ability of a single person at the top is living dangerously, observes Probst and Raisch (2005). Organizational crisis, which includes both bankruptcy and a dramatic fall in market value, has increasingly affected blue chip companies in recent years. Probst and Raisch (2005) have carried out in-depth analysis of the 100 largest organizational crises during the year 2000 – 2005, to identify the root causes including the role CEO leadership played in this crisis. The diagram below shows, how the successful companies suddenly crash. Autocratic CEO leadership in an environment of excessive growth, drives the company to uncontrolled changes by diversifying in to unrelated businesses, in order to sustain the momentum of excessive growth. This gets compounded by excessive success culture marked by

Fig. 3: Organization consequences of follower’s relationship with leaders (prepared based on Howell & Shamir (2005))

Personalised

Blind faith on leader

Leader feels empowered

Mission congruent relationship

Constant discussion with leader on, ’means’ and ‘outcomes’

Leader can hijack the organization to meet own agenda

Followers

Socialised

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Leader cannot hijack

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Fig. 4 – Causes of Company Crash Based on Probst et al. (2005) • Autocratic leadership • Excessive success culture

• Excessive growth • Unrelated M& A

Burnout syndrome

Organization Crash • Weak Leadership in relation to subordinates / unions • Lacking success culture

• Stagnant growth • Clinging to status quo

excessive bonuses and internally competitive culture, all of these lead the organization to burn out and eventually crash. Similarly, in the organizations which have weak leadership suffer from lack of success culture. This results in stagnation, premature aging and financial crash of an organization. From these researches, one finds that following factors could lead to disastrous consequences for the organization – •

Excessive job demand

•

Excessive monetary reward

•

High quality but personalized leader – follower relationship

•

Low quality leader – follower relationship

The first two factors as we all know are getting increasingly more pronounced in Indian business context. Jobs are becoming more demanding and monetary rewards in form of performance bonuses and stock options are increasingly becoming common place as well. In terms of quality and nature of leaderfollower relationship, let us look at Indiansocial culture. Hofstede (1980) in his study of 40 countries established that Indian culture consists of high power distance which promotes

Premature aging syndrome

personalized bureaucracy i.e. people in power decide what happens and others follow. Javidan and House (2002) in their Global Leadership and Organizational Behavior Effectiveness (GLOBE) project surveyed over 18000 managers across 622 countries have reaffirmed that in Indian Culture, Power distance in the organizations are high. Therefore, there is a great chance that Indian business organization will either have leadership with close personalized relationship with followers who blindly follow them or leaders who are distant from their followers. Either of these two scenarios will further increase the vulnerability of Indian business organization. Overall, therefore our business organizations are very vulnerable to being hijacked by powerful leaders with blind followings leading to organization crash. From the media reports, it appears that Satyam Infotech is perhaps a recent example of such an organization crash led by powerful promoter Chairman Ramlingam Raju. He appears to have never been questioned by his management team members. They blindly followed him. April | 2009 NHRD Network Journal

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How do we prevent organization getting hijacked to personal agenda of leaders? First and foremost, value base is very important for a leader under such situation. Value base will be the moral compass which will guide the leader to choose the right from wrong under moments of extreme pressure and temptations. Secondly, leader must develop a strong top management team who are totally aligned to values and mission of the organization. Such members of the top management team will have, ‘socialized relationship’ with the leader. Consequently there will be healthy climate of constant discussions and scrutiny of ‘means’ and ‘outcomes’. Probst and Raizch (2005) based on their analysis of top 100 organization crisis during the

first five years of this millennium, recommend that, to avoid organization crisis, CEO needs to ensure – • Sharing of power with team members • Establish process of ‘checks’ and ‘balance’ • Create bottom up culture that encourages constructive questioning • Promote trust through openness in communication • Promote integrity and cooperation We need to assess the organizations on these dimensions and facilitate building appropriate processes and culture in our organizations so as to avert such disasters in future.

References Ashley, A., and Patel, J.B. (2003). The impact of Leadership characteristics on corporate performance. International Journal of Value – based management, 2003;16,3 Augier, M., & Teece, D.J. (2005). Reflections on Leadership: A report on a seminar on Leadership and Management Education. California Management Review, Vol. 47, No.2. Brower, H.H, Schoorman, F.D & Tan, H.H (2000), A Model of Relational Leadership: the integration of trust and leader – member exchange. The Leadership Quarterly 1192), 227-250. Cannella Jr, A.A, and Monroe, M.J. (1997). Contrasting perspectives on strategic leaders: toward a more realistic view of top managers. Journal of Management, Vol.23, No.3, pp. 213 (25) Day, D.V. and Lord, R.G. (1988), Executive Leadership and Organizational Performance. Journal of Management, 14, 453 – 464. Fiedler, F. E. (1967). A Theory of Leadership Effectiveness. McGraw-Hill Book Company, New York. Gerstner,(.R.) and Day, D.V. (1997) Meta-analysis review of Leader – member exchange theory: correlation and construct issues, Journal of Applied Psychology, 82 : 827-844. Hambrick, C.D., Finkelstein, S and Mooney, A.C. (2005). Executive Job Demands: new insights for explaining strategic decisions and leader behaviors. Academy of Management Review, Vol.30, No.3, 472 – 491 Hambrick, C.D. and Mason P.A. (1984). Upper Echelons: The Organization as a Reflection of its Top Managers. Academy of Management Review, 9 : 193 –206. Hersey, P. and Blencherd, K.H., (1969), Management of Organizational Behavior: Utilizing Human Resources. Eaglewood Cliffs, New Jersey. Hofstede, G. (1980). Culture’s Consequences: International Differences in Work - Related Values. SAGE Publications Ltd., New Delhi. Hogan, R. and Kaiser, R.B. (2005). What we know about leadership, Review of General Psychology, Vol.9, No.2, 169-180. House, R. (1971), A Patt-Goal Theory of Leader Effectiveness, Administrative Science Quarterly, September, 321-38. Janssen, O., & Van Yperen, N. W. (2004). Employees’ Goal Orientations, The Quality Of Leader-Member Exchange And The Outcomes Of Job Performance And Job Satisfaction. Academy of Management Journal. Vol. 47, No. 3, 368 – 384. Javidan, M. and House, R.J. (2002). Leadership and Cultures around the world: findings from Globe. Journal of World Business 37; 1-2 Joyce, T.A., Nohria, N. and Roberson, B. (2003). What Really Works: The 4+2 Formula for Sustained Business Success. Newyork : Harpen Business. Liden, R. ad Graen, G. (1980), Generalizability of the vertical Dyad linkage model of leadership. Academy of Management Journal, September, 451-465.

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Lord, R. G., & Brown, D. J. (2001). Leadership, Values, and subordinate self-concepts. The Leadership Quarterly 12, 133 – 152. Piper, T.R. (2002). What Leaders Need to do to Restore Investor Confidence. Harvard Business School - Working Knowledge. October 7, 2002. Probst, G., & Raisch, S. (2005). Organizational crisis: The logic of failure. Academy of Management Executive. Vol. 19. No.1. Sinha, J.B.P., (1990) Work culture in the Indian context, Sage Publication, New Delhi. Stogdill, R. M. (1974). Handbook of Leadership - A survey of Theory and Research. The Free Press. New York. Vaishali and Kumar, M.P. (2003). Leadership Effectiveness on Organizational Climate and Burnout: A Putt Analytic Approach. In S. Bhargava (Ed.), Transformational Leadership, Sage Publications: New Delhi. Vroom, V.H. and Yetton, P.W., Leadership and Decision Making (Pittsburgh: University of Pittsburgh Press, 1973). Wang, H., Law, K. S., Hackett, R. D., Wang, D., & Chen, Z. X. (2005). Leader-Member Exchange As A Mediator Of The Relationship Between Transformational Leadership And Followers’ Performance And Organizational Citizenship Behavior. Academy of Management Journal. Vol. 48, No. 3, 420 -432. Whittington, J.L., Goodwin, V.L. and Murray, B. (2004). Transformational leadership, goal difficulty and job design: independent study and interactive effects on employee outcomes. Leadership Quarterly 15, 593-606. Wright, P., Theerathorn, P., Tu, H., Gilmore, J.B. and Lado, A. (1992). Top managers, organizational culture and strategic profiles: implications for business performance. American Business Review, June 1992, 25-36.

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HOW TO IMPROVE PERFORMANCE IN ALL PARTS OF LIFE STEWART D. FRIEDMAN Abstract Leadership, as this article explains is not just excelling in the professional sphere, but in all walks of life. It is a holistic development that makes an individual achieve his/her goals in all domains. The article presents the idea of ‘Total Leadership Development’ which rests on the principles of being real, acting with integrity and being innovative with everything that one does.

About the Author Stewart D. Friedman is a Practice Professor of Management at the University of Pennsylvania’s Wharton School in Philadelphia and the founding director of the Wharton School’s Leadership Program. He has consulted with a wide range of organizations and executives, including Jack Welch and Vice President Al Gore; he serves on numerous advisory boards; and he conducts workshops globally on leadership and the whole person, creating change, and strategic human resources issues. Prof. Friedman is author of works, including his 2008 book, the best-selling and award-winning Total Leadership: Be a Better Leader, Have a Richer Life. His 2000 book, Work and Family – Allies or Enemies?, was recognized by the Wall Street Journal as one of the field’s best. Working Mother magazine recognized him as being one of America’s most influential men for having improved conditions for working parents. The New York Times noted that his students talk him “with a mixture of earnest admiration, gratitude, and rock star adoration.” To learn more, visit www.totalleadership.org.

In my research and coaching work over the past two decades, I have met many people who feel unfulfilled, overwhelmed, or stagnant because they are forsaking performance in one or more aspects of their lives. They aren’t bringing their leadership abilities to bear in all of life’s domains – work, home, community, and self (mind, body, and spirit). Of course, there will always be some tension among the different roles we play. But, contrary to the common wisdom, there’s no reason to assume that it’s a zero-sum game. It makes 16

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more sense to pursue excellent performance as a leader in all four domains – achieving what I call “four-way wins” – not trading off one for another but finding mutual value among them. This is the main idea in a program called Total Leadership that I teach at the Wharton School and at companies and workshops around the world. “Total” because it’s about the whole person and “Leadership” because it’s about creating sustainable change to benefit not just you but the most important people around you.

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Scoring four-way wins starts by taking a clear view of what you want from and can contribute to each domain of your life, now and in the future, with thoughtful consideration of the people who matter most to you and the expectations you have for one another. This is followed by systematically designing and implementing carefully crafted experiments – doing something new for a short period to see how it affects all four domains. If an experiment doesn’t work out, you stop or adjust, and little is lost. If it does work out, it’s a small win; over time these add up so that your overall efforts are focused increasingly on what and who matter most. Either way, you learn more about how to lead in all parts of your life. This process doesn’t require inordinate risk. On the contrary, it works because it entails realistic expectations, short-term changes that are in your control, and the explicit support of those around you. Take, for instance, Kenneth Chen, a manager I met at a workshop in 2005. (All names in this article are pseudonyms.) His professional goal was to become CEO, but he had other goals as well, which on the face of it might have appeared conflicting. He had recently moved to Philadelphia and wanted to get more involved with his community. He also wished to strengthen bonds with his family. To further all of these goals, he decided to join a city-based community board, which would not only allow him to hone his leadership skills but also have benefits in the family domain. It would give him more in common with his sister, a teacher who gave back to the community every day, and he hoped his fiancée would participate as well, enabling them to do something together for the greater good. He would feel more spiritually alive and this, in turn, would increase his self-confidence at work. Now, about three years later, he reports that he is not only on a community board with his

fiancée but also on the formal succession track for CEO. He’s a better leader in all aspects of his life because he is creatively enhancing his performance in all domains of his life and leading others to improve their performance by encouraging them to better integrate the different parts of their lives, too. Kenneth is not alone. Workshop participants assess themselves at the beginning and the end of the program, and they consistently report improvements in their effectiveness, as well as a greater sense of harmony among the once competing domains of their lives. In a study over a four-month period of more than 300 business professionals (whose average age was about 35), their satisfaction increased by an average of 20% in their work lives, 28% in their home lives, and 31% in their community lives. Perhaps most significant, their satisfaction in the domain of the self – their physical and emotional health and their intellectual and spiritual growth – increased by 39%. But they also reported that their performance improved: at work (by 9%), at home (15%), in the community (12%), and personally (25%). Paradoxically, these gains were made even as participants spent less time on work and more on other aspects of their lives. The process is pretty straightforward, though not simple. In the sections that follow, I will give you an overview of the process and take you through the basics of designing and implementing experiments to produce four-way wins. The Total Leadership Process The Total Leadership concept rests on three principles: • Be real: Act with authenticity by clarifying what’s important • Be whole: Act with integrity by respecting the whole person April | 2009 NHRD Network Journal

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• Be innovative: Act with creativity by experimenting with how things get done. You begin the process by thinking, writing, and talking with peer coaches to identify your core values, your leadership vision, and the current alignment of your actions and values – clarifying what’s important. Peer coaching is enormously valuable, at this stage and throughout, because an outside perspective provides a sounding board for your ideas, challenges you, gives you a fresh way to see the possibilities for innovation, and helps hold you accountable to your commitments. You then identify the most important people – “key stakeholders” – in all domains and the performance expectations you have of one another. Then you talk with them. These insights create opportunities for you to focus your attention more intelligently, spurring innovative action. Now, with a firmer grounding in what’s most important, and a more complete picture of your inner circle, you begin to see new ways of making life better, not just for you but for the people around you. The next step is to design experiments and then try them out during a controlled period of time. Our research has revealed that most successful experiments combine components of nine general categories. Thinking about possibilities in this way will make it easier for you to conceive of the small changes you can make that will mutually benefit your work, your home, your community, and yourself. Most experiments are a hybrid of some combination of these categories: Tracking and Reflecting: Keeping a record of activities, thoughts and feelings (and perhaps distributing it to friends, family, and coworkers), to assess progress on personal and professional goals, thereby increasing self-awareness and maintaining 18

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priorities. Examples: record visits to the gym along with changes in energy levels; track the times of day when you feel most engaged or most lethargic. Planning & Organizing: Taking actions designed to better use time and prepare and plan for the future. Examples: use a PDA for all activities, not just work; share your schedule with someone else; prepare for the week on Sunday evening. Rejuvenating & Restoring Designing Experiments: Attending to body, mind, and spirit so that the tasks of daily living and working are undertaken with renewed power, focus & commitment. Examples: quit unhealthy physical habits (smoking, drinking); make time for reading a novel; engage in activities that improve emotional and spiritual health (yoga, meditation, etc.) Appreciating & Caring: Having fun with people (typically, by doing things with coworkers outside work), caring for others & appreciating relationships as a way of bonding at a basic human level to respect the whole person, which increases trust. Examples: join a book group or health club with coworkers; help your son complete his homework; devote one day a month to community service. Focusing & Concentrating: Being physically present, psychologically present, or both when needed to pay attention to stakeholders who matter most. Sometimes this means saying no to opportunities or obligations. It includes attempts to show more respect to important people encountered in different domains and the need to be accessible to them. Examples: turn off digital communication devices at a set time; set aside a specific time to focus on one thing or person; review e-mail at preset times during the day. Revealing & Engaging: Sharing more of yourself with others – and listening – so they can better support your values and the

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steps you want to take toward your leadership vision. By enhancing communication about different aspects of life, you demonstrate respect for the whole person. Examples: have weekly conversations about religion with spouse; describe your vision to others; mentor a new employee. Time Shifting & “Re-Placing”: Working remotely or during different hours to increase flexibility and thus better fit in community, family, and personal activities while increasing efficiency; questioning traditional assumptions and trying new ways to get things done. Examples: work from home; take music lessons during your lunch hour; do work during your commute. Delegating & Developing: Reallocating tasks in ways that increase trust, free up time, and develop skills in yourself and others; working smarter by reducing or eliminating low-priority activities. Examples: hire a personal assistant; have a subordinate take on some of your responsibilities. Exploring & Venturing: Taking steps toward a new job, career, or other activity that better aligns your work, home, community, and self with your core values and aspirations. Examples: Take on new roles at work, such as a cross-functional assignment; try a new coaching style; join the board of your child’s day care center. Designing Experiments To pursue a four-way win means to produce a change intended to fulfill multiple goals that benefit each and every domain of your life. In the domain of work, typical goals for an experiment can be captured under these broad headings: taking advantage of new opportunities for increasing productivity, reducing hidden costs, and improving the work environment. Goals for home and

community tend to revolve around improving relationships and contributing more to society. For the self, it’s usually about improving health and finding greater meaning in life. As you think through the goals for your experiment, keep in mind the interests and opinions of your key stakeholders and anyone else who might be affected by the changes you are envisioning. Some experiments benefit only a single domain directly, while having indirect benefits in the others. For example, setting aside three mornings a week to exercise improves your health directly but may indirectly give you more energy for your work and raise your self-esteem, which in turn might make you a better father and friend. Whether the benefits are direct or indirect, achieving a four-way win is the goal. That’s what makes the changes sustainable: Everyone benefits. Identify Possibilities Open your mind to what’s possible and try to think of as many potential experiments as you can, describing in a sentence or two what you would do in each. At first blush, conceiving of experiments that produce benefits for all the different realms may seem a formidable task. After all, if it were easy, people wouldn’t be feeling so much tension between work and the rest of their lives. But I’ve found that most people realize it’s not that hard once they approach the challenge systematically. Conversations about work and the rest of life tend to emphasize segmentation. However, it might be better to make boundaries between domains more permeable, not thicker. The very technologies that make it hard for us to maintain healthy boundaries among domains also enable us to blend them in ways – unfathomable even a decade ago – that can render us more productive and more fulfilled. The challenge we all face is April | 2009 NHRD Network Journal

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learning how to use them wisely, and smart experiments give you an opportunity to increase your skill in doing so. The main point is to identify possibilities that will work well in your unique situation. All effective experiments require that you question traditional assumptions about how things get done, as the sales director did. Whatever type you choose, the most useful experiments feel like something of a stretch: not too easy, not too daunting. It might be something quite mundane for someone else, but that doesn’t matter. What’s critical is that you see it as a moderately difficult challenge. Coming up with possibilities is an exercise in unbounded imagination. But when it becomes time to take action, it’s not practical to try out more than three experiments at once. Now the priority is to narrow the list to the three most-promising candidates by reviewing which will: • Give you the best overall return on your investment • Be the most costly in regret and missed opportunities if you don’t do it • Allow you to practice the leadership skills you most want to develop • Be the most fun by involving more of what you want to be doing • Move you furthest toward your vision of how you want to lead your life The investment in a well-designed experiment almost always pays off because you learn how to lead in new and creative ways in all parts of your life. Measuring Progress The only way to fail with an experiment is to fail to learn from it, and this makes useful metrics essential. Failed experiments give you, and those around you, information that helps create better ones in the future. 20

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To set up your own scorecard for four-way wins, use a separate sheet for each experiment; at the top of the page, write a brief description of it. Then record your goals for each domain in the first column. In the middle column, describe your results metrics: how you will measure whether the goals for each domain have been achieved. In the third column, describe your action metrics – the plan for the steps you will take to implement your experiment. As you begin to implement your plan, you may find that your initial indicators are too broad or too vague, so refine your scorecard as you go along to make it more useful for you. The main point is to have practical ways of measuring your outcomes and your progress toward them, and the approach you take only needs to work for you and your stakeholders. Workshop participants have used all kinds of metrics: cost savings from reduced travel, number of e-mail misunderstandings averted, degree of satisfaction with family time, hours spent volunteering at a teen center, and so on. Metrics may be objective or subjective, qualitative or quantitative, reported by you or by others, and frequently or intermittently observed. For examples, please visit www.totalleadership.org. Small Wins for Big Change Experiments shouldn’t be massive, all encompassing shifts in the way you live. The best experiments let you try something new while minimizing the inevitable risks associated with change. When the stakes are smaller, it’s easier to overcome the fear of failure that inhibits innovation. You start to see results, and others take note, which both inspires you to go further and builds support from your key stakeholders. Another benefit of the small-wins approach to experiments is that it opens doors that would otherwise be closed.

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By framing an experiment as a trial, you reduce resistance because people are more likely to try something new if they know it’s not permanent and if they have control over deciding whether the experiment is working according to their performance expectations. But “small” is a relative term – what might look like a small step for you could seem like a giant leap to me, and vice versa. Large-scale change is grounded in small steps toward a big idea. So while the steps in an experiment might be small, the goals are not. Ismail, a successful 50-year-old entrepreneur and CEO of an engineering services company, described the goal for his first experiment this way: “Restructure my company and my role in it.” Ismail designed practical steps that would allow him to move toward his large goal over time. His first experiments were small and achievable. He introduced a new method that both his colleagues and his wife could use to communicate with him. He began to hold sacrosanct time for his family and his church. As he looked for ways to free up more time, he initiated delegation experiments that had the effect of flattening his organization’s structure. These small wins crossed over several domains, and eventually he did indeed transform his company and his own role

in it. When I spoke with him 18 months after he’d started, he acknowledged that he’d had a hard time coping with the loss of control over tactical business matters, but he described his experiments as “a testament to the idea of winning the small battles and letting the war be won as a result.” He and his leadership team both felt more confident about the firm’s new organizational structure. People try the Total Leadership program for a variety of reasons. Some feel unfulfilled because they’re not doing what they love. Some don’t feel genuine because they’re not acting according to their values. Others feel disconnected, isolated from people who matter to them. They crave stronger relationships, built on trust, and yearn for enriched social networks. Still others are just in a rut. They want to tap into their creative energy but don’t know how (and sometimes lack the courage) to do so. They feel out of control and unable to fit in all that’s important to them. You have to know how to look for fourway wins and then find the support and zeal to pursue them. No matter what your career stage or current position, you can be a better leader and have a richer life – if you are ready and willing to rise to the challenge.

Author’s Note This article is adapted from “Be a Better Leader, Have a Richer Life”, an article by Stewart D. Friedman that appeared the April 2008 issue of Harvard Business Review. All rights reserved. April | 2009 NHRD Network Journal

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PACE, THEN LEAD PAUL HERSEY Abstract Leaders influence others through both personal power and position power, though these are modern terms given to the age old question of whether it is better to rule by love or fear. The answer to that question is that both are needed in order to be an effective leader because what works in one situation may not be what is needed in another. About the Author Paul Hersey is an internationally renowned behavioral scientist, recognized by business leaders around the world as one of the outstanding authorities on training and human resource development. His research at the Center for Leadership Studies led to the development of the Situational Leadership® Model. This approach to leadership has been used to train over 14 million managers including those in some of the most well known Fortune 500 companies. The model reminds us that it is not enough to describe your leadership style or communicate your intentions. A Situational Leader assesses the performance of others and takes responsibility for making things happen. Founder and Chairman of the Board of the Center for Leadership Studies, Paul Hersey’s current passion resides with online training and the personalized development tools that technology makes possible.

Etzioni (1961) described personal power as the extent to which a leader gains the confidence and respect of others and has the ability to generate cohesiveness and commitment. At its most basic level, it is about the willingness of others to follow a leader, and that has to be earned. Position Power differs in that it is the extent to which the leader has rewards, a recognized formal role and if needed, sanctions to bring to bear in reference to their people. The confidence and trust leaders develop with the people above them often dictates the willingness of upper management to delegate power down to them. A leader’s behavior impacts how willing others are to follow them and subsequently 22

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how willing those above are to dole out their power. One way to increase their willingness to share and your effectiveness as a leader is to build upon your personal power by establishing rapport. Part of establishing rapport is being able to communicate effectively in a way that is comfortable for the people you are attempting to influence. To make people get comfortable you have to get in step with them – pace with them. Rapport is about being attuned to other people verbally or nonverbally so that they are comfortable and have trust and confidence in you. Too often leader’s listen just enough to form their rebuttal or make their case instead of hearing the way in which the words are expressed or truly

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seeing the facial features and body language for what it is, the second half of the message. Effective communication requires that you demonstrate interest, understanding and genuine concern for others. Faking it won’t work because people hear your tone and pick up unconscious cues about your sincerity. As a Leader you must take the time to develop rapport so that others can feel comfortable and have trust and confidence in you. How do you develop rapport? You reflect what others do, know or assume to be true by doing something similar or matching some part of their ongoing experience. It’s called pacing. When you have established rapport with people, they are more apt to follow your lead. And that is the point, isn’t it: to be able to influence the behaviors of others in a way that impacts positively on performance? That requires a measure of adaptability on the part of a leader. An effective leader needs to have enough range in their own behavior to pace with others with whom they are interacting. That’s because there is no single right way. As a leader you need to be flexible enough to select from a variety of influence behaviors according to both the demands of your specific situation and your potential to positively influence the outcome. Essentially, power is your influence potential. For instance, ever wonder why some leaders can give orders with complete authority while others are

questioned and challenged at every request. Attempting to influence people with these leadership behaviors may very well be what is needed when performance is low, but to be effective in this directive style it requires a degree of position power to support or drive the leader’s behavior. Oftentimes a leader knows what the right thing to do is but realizes that, if they do actually behave that way people may not follow willingly. In that instance they know intuitively that they can’t rely on the most obvious base of power that matches the leadership behaviors and would be most effective in a given situation, so they have learned to be more creative in how they attempt to influence others. They compensate by using less effective leadership behaviors that they do have the power to support. They get the job done, but it isn’t quick and painless. Don’t be the leader who has to compensate for their lack of power. Make a plan to develop your power by figuring out what you do that is eroding your effectiveness and stop it. Come up with a list of what you want to do more of and what you want to do less of. Don’t go it alone. Enlist a person who has a significant impact on your success. Solicit their help and suggestions so you can earn the personal power necessary to be able to ask for the allocation of the position power needed to be an effective leader. As a leader you can build a case and negotiate for an increase in position power. It is increasing your personal power that takes work and time as you prove yourself worthy!

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LEADERSHIP THEORY: IN EVOLUTION N.S. RAJAN Abstract Leadership as a phenomenon has enthused the minds of researchers from time immemorial. The canon of 'leadership' is constitutive of writings of both past philosophers and modern theorists; the difference being, the nomenclature of 'leadership' used by ancient scholars - of rulers, politicians and heroes, was unlike that used by modern theorists. This article explores the illuminating journey that 'leadership' has travelled through the minds of great people. It throws light upon the historical evolution of leadership theory, reflects upon definitions and theories and also questions ambiguous facets of this ever evolving concept. Moreover, the article emphasizes on the need for an integrated framework for leadership which synthesizes different approaches to form a more comprehensive theory of leadership. It also calls for constructing a 'roadmap' for developing leaders who can steer organizations through uncharted waters to sustained glory and success.

About the Author N.S. Rajan, a Business Management alumnus of XLRI, is Partner in the Human Capital Practice of Business Advisory Services in Ernst & Young India. He is also the Global Leader - HR Advisory of Ernst & Young. With over two and half decades of work experience, in both industry and consulting across many functions, Rajan brings with him comprehensive knowledge of the issues facing the human resources function. Rajan has been accorded the "HR Professional of the Year 2008" for excellence and contribution to human resources function by NHRD Network, the country's largest association of HRD professionals. He can be reached at [email protected].

Who should lead us? Plato, the Greek philosopher, poses this critical question in his Republic, written around 380 BC, where he envisages an Ideal State led by specially educated leaders, the "philosopher kings". Kautilya, the renowned prime minister of the Maurya Empire in the fourth century BC, in his economic treatise Arthashastra, dwelt on the role of a king as a leader who recognizes the need to serve his subjects 24

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even as he stays focused on achieving results. Although, the nomenclature of 'leadership' was not in vogue, philosophical speculations and insightful histories of yore have dwelt in penetrating depth upon rulers, politicians and heroes, offering us early frameworks. Leadership research has gained prominence among researchers in the last two centuries on account of rapid industrialization.

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Our understanding of the concept of leadership has transformed radically since 1300 when the word "leader" first appeared in the English language originating from the root leden meaning "to travel" or "show the way." (The Oxford English dictionary) Leadership as a word is said to have entered the lexicon much later. "Great necessities call forth great leaders", wrote Abigail Adams in 1790. The need for leaders has been felt over the ages across all walks of life. Who is a leader? Is there an ideal business leader? What attributes make an effective leader? Is leadership implicitly 'good'? How is a leader different from a manager? Can organizations create leaders? In current times, these questions have been dwelt upon by researchers who have endeavored to unravel the way forward. "Leadership is one of the most observed and least understood phenomena on earth" observed Burns (1978), three decades ago. The 20th century in particular has witnessed a wide range of theories being put forth. The extent of interest led Stogdill (1981) to observe ironically that "there are almost as many definitions of leadership as there are persons who have attempted to define the concept". Warren Bennis (1985) too lamented the fact that there are over 300 definitions of leadership, even as the world clearly recognizes the dire quest for leaders. Yukl (1981) noted that "the term leadership is a word taken from the common vocabulary and incorporated into the technical vocabulary of scientific discipline without being precisely defined." Without a universal definition, how does an organization recognize a leader, or even go a step forward to create one. Many scholars and practitioners have endeavored to uncover assumptions, discover new contours, and question uncertainties. A lucid system of thought on the emergence of leadership theory is hence essential to

provide a frame work, to build concepts for the future, and to convert theory to action. Van Seters and Field, Fleet and Yukl, Armandi et al have reviewed the empirical research and developments over the past many decades paving a systematic way to understand how leadership science has evolved. Dorfman (1996) suggested leadership research is often complex and not as simplistic as it seems, though he depicted leadership research passing through three eras i.e. trait, behavior and contingency eras. The categorization provided by Van Seters and Field (1990) provides a practical framework, using which an attempt has been made to comment on some of the keystones of the arch of leadership thought, grouping related schools of research rather than being bound by a chronological order of discoveries in the vast area of leadership. Personality • Great Man Theory - Bowden 1927, Carlyle 1841 , Galton 1869 • Trait Theories - Bingham 1927 Early theories on leadership primarily focused on historical personalities and what made them strong leaders, with an attempt to equate leadership with personality. Great Man theory contended that leadership traits are inherited. This school was based on the belief that leaders are exceptional people, born with innate qualities, destined to lead. Leadership was thought of as a concept which is primarily male, military and Western. Trait theories identified traits that differentiate leaders from non-leaders. This school also focused on the lists of traits or qualities associated with leadership. Research findings further focused on being able to identify traits that distinguish leaders from non-leaders. The April | 2009 NHRD Network Journal

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trait theories often could not accommodate leader- subordinate's interactions and was disconnected from situational conditions. Leadership then was viewed from the point of power and influence, where leadership was examined as a relationship between people. Influence • Power Relation Theories -French 1956, French and Raven 1959 • Persuasion Theories - Schenk 1928 This school recognized leadership as relation between individuals and not a characteristic of the solitary leader and attempted to explain leadership effectiveness in terms of source and use of power. This school acknowledged that leadership is a process that involves relationship between people and can therefore not be understood by focusing exclusively on leadership as a specialized role. Behavior • Early Behavior Theories - Bass 1960, Fleishman, Hariris and Burtt 1955, Likert 1961

to deliberating on their traits or the power they possess, leading empirical studies to focus on behavioural traits rather than personality. The two major studies on behavioural aspects of leadership were the Michigan study and the Ohio state studies which highlighted initiating structure (leader emphasis on accomplishment of tasks) and consideration (leader concern for individual and group cohesion). A related area built on the dimension of Michigan studies was the managerial style grid which dwelt on the two corner stones of care for people and concern for production, where five styles of leadership were identified (Blake and Mouton, 1964). This concluded that managers who are able to score highly on both the dimensions of people and production have performed better than the others due to what has been recognized as the best form of team management (Wren, D. 1994). This view did not take into account the fact that the right leader types are likely to be moderated by constraints which are situational in nature. Theories X and Y tried to provide a framework on who needs direction and who is self-motivated (McGregor D., 1960). Situation • Environment Theory - Hook 1943, Katz and Kahn 1978

• Late Behavior Theories - Blake and Mouton 1964, Bowers and Seashore 1966, Argyris 1976, McGregor 1960

• Social Status Theory- Stogdill 1959, Homans 1959

• Operant Theories - Sims 1977, Ashour and Johns 1983

• Socio-Technical Theory - Trist and Bamforth 1951

The behaviour school concentrated on what leaders actually do rather than on their qualities. Different patterns of behavior are observed and categorized as 'styles of leadership'. The behavioural theories moved on to understanding leadership as what leaders do, as compared

This school sees leadership as specific to the situation in which it is being exercised. It also proposes that there may be differences in required leadership styles at different levels in the same organization. Situational aspects gained significant attention with a number of empirical

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• Contingency Theory -Fiedler 1964

variables: Leader-member relations, Task structure and Position power. The Pathgoal theory identified four possible behaviors exhibited by leaders: Directive, Supportive, Participative and Achievement-oriented. Normative theory relates leadership behavior to decision making incorporating 7 contingencies on task structures and five alternative styles. Adair laid down a framework for what leaders should do in order to be effective. The Action Centered Leadership model distinguishes three groups of activities i.e. Achieving the Task, Building and maintaining the Team and Developing the Individual, which are highly interrelated. None can be viewed in isolation, and all must receive leadership attention in order for any to work effectively and for organizational goals to be met. The Contingency theories do not explain clearly why employees follow nor do they offer prescriptions on suggested behaviors for different situations.

• Path Goal theory - Evans 1970, House 1971

Transactional

studies highlighting the importance of nature of task, social status, relative possession of power and external environment (Bass, 1985). Situational variables are organization, nature of work, characteristics of subordinates, nature of external environment. The environment theories explored how leaders emerge in the right place at the right time to take the lead. The social-status theories are based on the idea that as individuals complete specific tasks, they reinforce the expectation that each individual will continue to act congruent with previous behavior. The leader's and subordinate's roles are thus defined by mutual expectation of their behavior. The socio technical theory combined the environment and social status theory. Contingency

• Situational Theory - Hersey and Blanchard 1969, 1977 • Multiple Linkage Model- Yukl 1971, 1989 • Normative Theory - Vroom and Yetton 1973, Vroom and Jago 1988 • Action Centered Leadership: Adair 1973 Leadership studies then moved on to an important phase of contingency era where major advances were made in the form of the Fiedler model (Fiedler, 1964), Path-goal theory (Bass, 1985) and Normative Theory (Vroom and Yetton, 1973). This school represented the view that effective leadership is contingent on one or more factors of behavior, personality, influence and situation. Fiedler identified leadership situations as a result of three contingency

• Exchange Theories - Dansereau, Graen and Haga 1975, Greene 1975, Hollander 1958 • Role Development Theories Hollander 1979, Jacobs 1970, Graen and Cashman 1975 This school emphasizes the importance of the relationship between leader and followers, focusing on the mutual benefits derived from a form of 'contract' through which the leader delivers such things as rewards or recognition in return for the commitment or loyalty of the followers. Bass's (1985, 1990) work characterized the exchange period and emphasized the importance of transactions between leaders and followers as well as leader's role in initiating and sustaining interaction. The April | 2009 NHRD Network Journal

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importance of influence between leader and subordinate returned to focus with the transactional approach. Vertical dyad linkage (Graen, 1975) examines relationship between leader and followers on a one on one basis, and the mutual influence there of, as compared to the group as a whole. There was emphasis laid on equitable exchange relationships, and individual interactions dominating relation between the leader and the group, sometimes almost suggesting that the subordinate could be the leader. Anti-Leadership

This school suggested Leadership is omnipotent in the culture of the entire organization. Leaders can create a strong culture so that employees lead themselves. The paradigm of leadership started getting viewed as an intrinsic part of the culture of the organization and more importantly enhancing quality of over taking the need to increase quantity of work (Peters and Waterman, 1982, "In Search of Excellence"). This era for the first time changes the focus from quantity enhancement to quality enhancement. This school can also be viewed as an extension of the substitute theories.

• Ambiguity Theories - Pfeffer 1977

Transformation

• Substitute Theories - Kerr and Jermier 1978 This school is based on the sentiment that perhaps leadership as a concept cannot really be articulated. The leadership has been perceived as the perceptual phenomenon in the mind of the observer. The numerous approaches to leadership led to the view that most research is inconclusive and there is no universal understanding of leadership. In the article "The Ambiguity of Leadership" the leader is viewed as a symbol indicating to be almost insignificant (Pfeffer, 1977). This school research also focused on developing leadership substitute. Culture • Mckinsey 7 S - Pascale and Athos 1981 • Theory Z - Ouchi and Jaeger 1978 • In Search of Excellence -Peters and Waterman 1982 • Schien Theory - Schien 1985 • Self Leadership - Manz and Sims 1987 28

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• Charisma Theories - House 1977, Burns 1978 • Self Fulfilling Prophecy - Field 1989, Eden 1984, Bass 1985 • Leadership Brand – Ulrich and Smallwood, 1999 The central concept in this school is change, and the role of leadership in envisioning and implementing the transformation of organizational performance. The task of leadership is one of building, monitoring and reinforcing culture of high expectation. Concepts of charisma and transformational ability have started gaining recognition. Leadership has also been seen as vision. The ability to create positive expectations (Bass, 1985) has been observed as a primary role of a leader. The new leader (Bennis and Nanus, 1985) is one who energizes people to action, develops followers into leaders, and transforms organizational members into agents of change. Ulrich and Smallwood (1993) defined "Leadership is about more than individual, psychological competencies; it's also about delivering results. An effective leadership formula is leadership as a multiplicative function of attributes and results." Leaders who are

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able to demonstrate both right attributes and right results become "Leadership Brand". Results have been aligned to all internal and external stakeholders. The need for an integrative framework Leadership theories have thus been an important area of research in behavioral sciences, and continues to expand our understanding of leaders, leadership, and leadership development systems. While the utility of understanding leadership is beyond doubt, the futility of being able to create an integrated

universal model of leadership continues to engage researchers. Van Seters and Field (1990) also noted, in their review of literature over the years, "what is required is a conceptual integrating framework which ties the different approaches together, and makes possible the development of a comprehensive, sustaining theory of leadership". They depict the progress of leadership theory, in a schematic representation of affiliations and enveloping inter-linkages the development of view points, as shown below : ?

Integrative era

Self fulfilling prophecy period Transformational era Charisma period

Culture era

Influence

+

Situation

Substitute period Anti-leadership era Ambiguity period

Transactional era

Role development period Exchange period

Contingency era

Behaviour

+

Personality

+ Influence

+

Situation

Sociotechnical period Situation era

Social Status period Environment period Operant period

Behaviour era Late behaviour period Early behaviour period Influence era

Persuasion period Power relations period

Personality era

Trait period Great man period

Source: Van Seters and Field (1990) April | 2009 NHRD Network Journal

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Yukl (1981) suggested an insightful, integrating framework which can be used as the basis for furthering research into leadership that aims to link trait, behavior, situation and leadership effectiveness into one unified field for future discovery. P ers onal C harac teris tic As pec t

leaders, and create leadership development experiences to ensure that future leaders possess these attributes. Leadership theories have contributed to a great extent in development of leadership development methodologies. A practical

B ehavioral As pec ts

C riterion Is s ues

R eciprocal Influences

L eader C harac teris tic s

• • • •

L eader B ehavior

• 13 C ategories of behavior

T raits S kills C ompetencies P hys ical Attributes

E nd-R es ult V ariables

Intervening V ariables • S ubordinate C haracteris tics • G roup C haracteris tics • R ole C haracteris tics • E xternal R es ources

• • • •

P roductivity E ffectivenes s P s ychological Health Development & G rowth

Mic ro As pec t

Mac ro As pec t

L eader P ower • 5 B as es • 2 Directions

E xogenous S ituational V ariable • T as k/T echnology C haracteris tics • Organizational/ Legal/ P olitical F actors

Source: Yukl (1981) In the continuing quest for a universally applicable definition of leadership itself, a resultant corollary seems to be the divergence of routes that are being chosen by organizations for developing effective leaders. In the current globalized scenario with unprecedented challenges all around, leadership matters more than ever and organizations are investing a lot of time and resources to understand what makes a successful leader. Ulrich and Smallwood (2000) observed that there still is a critical need to identify a small set of attributes that successful leaders possess, articulate them in ways that could be transferred across all 30

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way forward, rooted in real life situations, is of great significance to construct a road map for developing leadership that can steer and enable sustained organizational success. The more one reviews literature on this vital field with the many strands of knowledge awaiting a synthesis, the resultant state of the aspirant still seems to be a "tabula rasa", a blank slate. It is vital to explore further the realms of what governs the roadmap of leaders, leadership, leadership effectiveness, and capability building that creates effective

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leaders. Ambiguity continues to prevail whether the path chosen is the right one. As a student of leadership, my own quest for a "golden mean" of consilience that serves as the bridge of understanding, between "a priori" and "a posteriori" states of our knowledge, remains intriguingly in a present-continuous state. Every step forward and each insight offered, by eminent scholars, practitioners and

custodians of intellectual capital helps throw light when we endeavour, as William Blake writes in "Auguries of Innocence", "To see a world in a grain of sand And a heaven in a wild flower Hold Infinity in the palm of your hand And eternity in an hour."

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OUR LEADERSHIP JOURNEY DAVE ULRICH and NORM SMALLWOOD* Abstract The authors have specially put together their last decade of work on leadership in this article. Focusing on the “Effective Leadership” formula, they further explore how Leaders build value and the importance of paying attention to leadership as an “Organization Capability”. Moving beyond the conventional approaches to explaining leadership as traits exhibited by the leader, this article calls for a balanced approach, exploring the results that leadership must attain. Leadership is not only about developing individual qualities but also about understanding how those qualities lead to superior performance. Therefore, apart from having effective attributes, Leadership will be considered effectual if it delivers results in the four key areas - employees, organization, customers and investors. About the Authors Dave Ulrich is a professor of business at the Ross School of Business, University of Michigan and co-founder of The RBL Group. He has written 15 books covering topics in HR and Leadership; is currently on the Board of Directors for Herman Miller; is a Fellow in the National Academy of Human Resources; and is on the Board of Trustees of Southern Virginia University. Norm Smallwood is cofounder of The RBL Group, he is coauthor of six books and more than a hundred and fifty articles, including two co-authored with Dave Ulrich in Harvard Business Review. Before The RBL Group, Norm was co-founder of The Novations Group and an internal consultant at Procter and Gamble and at Esso Resources Canada. If you google the word leader and leadership, there are 487 million hits. That’s an awful lot of information. If you google subordinate and follower there are less than 25 million hits. So, almost 20 times more has been written about leadership than about being a good subordinate. Maybe we’ve identified the crux of the leadership challenge- not enough followers!

value. Much is written and many of the same ideas are repeated. In the last decade, we have addressed the issue of how leaders have impact by contributing to this huge volume of work with four books and many articles. In this article, we’ll review this work and synthesize how we believe we’ve contributed a unique perspective around four ideas:

Clearly, leadership is a topic where the volume of writing does not match the

1. Leadership is about more than individual, psychological

* Please do not cite without permission. For further information see www.rbl.net or contact either Dave Ulrich ([email protected]) or Norm Smallwood ([email protected]).

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competencies; it’s also about delivering results. An effective leadership formula is leadership = attributes * results (Results Based Leadership, Harvard Business School Press, 1999) 2. Leaders must focus outside the firm on investors and customers, as well as inside, because results are tied to multiple stakeholders both inside and outside the organization. When this is done well, greater market value occurs. (Why The Bottom Line Isn’t, Wiley, 2003 and soft cover- How Leaders Build Value, Wiley, 2003) 3. Individual leaders matter; but leadership matters more. It’s critical to pay attention to leadership as an organization capability not just leader as individuals. When this capability ensures the desired customer experience, both customers and investors are served. (Capitalizing Your Capability, Harvard Business Review, 2004; Leadership Brand, Harvard Business School Press, 2007) 4. There are two kinds of individual leader competencies — a set of fundamental competencies — the leadership code and a set of unique competencies that relate to how leaders connect employees with customer — the differentiators. (The Leadership Code, Harvard Business School Press, 2008) Let us review the evolution of these ideas. Results Based Leadership – The Kickoff In the late 1990’s we had a simple insight – much of the practice of leadership was focused on individual, psychological competencies. Virtually every book we could find then, and to a great extent now, was aimed at individual, leader competency development (what we called the attributes of leaders). Popular examples include: 34

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• Seven Habits of Highly Effective People • Authenticity • Leadership Secrets of Attila the Hun, Thomas Jefferson, Buddha, Santa Claus, etc.) • Emotional Intelligence • Judgment • The Extraordinary Leader • And so on In seminars we frequently ask, “What makes an effective leader?” The response is often the same: setting a vision, having integrity, communicating, being bold, making things happen, and other personal attributes. Frequently, leadership development experiences are organized with a day on each attribute. We proposed that this approach was half right. Leaders do need to have effective attributes but leadership is also about getting results. So, in our 1999 book, Results Based Leadership, we explored four results that leaders need to deliver: • Employee — leaders must increase employee competence and commitment as evidenced in productivity and retention. • Organization — leaders must build sustainable capabilities that shape an organization’s identity • Customer — leaders must ensure customer delight as seen in share of customer • Investor — leaders must build investor confidence in the future as seen in intangible value It was at this time we realized the importance of the relationship between attributes and results. Neither alone is enough, it’s the virtual cycle between them that makes all the difference. We connect attributes and results with SO THAT

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and BECAUSE OF. One simple application is that when a leader receives 360-degree feedback, which is about her individual competencies, she must ask the “so that” query. I must improve this competency “so that” I deliver a particular result to one of my stakeholders. Alternatively, another leader delivers results and should ask the “because of” question. I delivered this result “because of” this competency I have (or lack).

innovation, service, efficiency, culture or shared mindset, and so on. These capabilities become the key to sustained strategy execution, the deliverables of HR, and the core identity of the organization. Customer results Ultimately, what happens inside an organization needs to deliver value to customers outside the organization. The tag line being “the employer of choice”

Figure 1: The Virtuous Cycle of Attributes and Results This simple chart has guided the last ten years of our writing and applications for leadership. Let us quickly overview each of four results, and then show how we have explored each of them in the last decade.

makes more sense if we are the employer of choice of employees our customers would choose. Using customer criteria as the filter for internal management actions validates those actions.

Employee results

Investor results

We have articulated a simple formula for employee results: competence * commitment * contribution. Leaders must enable employee results in all three areas. Employee competence means that the individual has the skills to do the job. Commitment or engagement is about investing discretionary energy to do what it takes to get things done. Contribution is about finding meaning in work.

What happens inside the organization also affects investor confidence for the future. Investors invest based on industry favorableness, firm performance, and quality of leadership and organization. We believe that the leadership and organization dimension is often the most difficult to specify, but also one that may hold a key to firm’s overall market value.

Organization results Organization theory has shifted the focus from structure, shape, and morphology to capabilities. Capabilities are the DNA of companies and determine how things are accomplished. Sample capabilities include: speed of change, learning, collaboration,

In the last decade, we have worked to further explore each of these four result areas. Investor Results: Why the Bottom Line Isn’t (or How Leaders Add Value) We began with a very simple question: “which of the four results areas are senior April | 2009 NHRD Network Journal

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Financial results account for a shrinking proportion of a company’s market value 1 0.9 0.8

Confidence in your future

0.7

Regression of earnings and stock price

0.6 0.5 0.4 0.3

Confidence in track record

0.2 0.1 0 1977

1982

1987

1992

2002

2005

Figure 2

executives most interested in?” With a few notable exceptions, senior executives tend to be interested in what investors want because it aligns with the executives’ personal interests and because it sustains the longevity of the firm. So, we began to read and ask questions about how market value was derived. Pretty soon we were reading the work of Baruch Lev, an economist at NYU who was the world’s expert on intangibles. At about this time, we felt as though our approach to leadership was going in a very different direction than what we knew our colleagues were studying and we were excited about what we were learning.

Since 1990, financial results have played a decreasing role in market value, so much so that across industries, by 2005, market value was half earnings and the other half intangibles. Intangibles are the factors that give investors confidence in the future of your company versus other competitors in the same industry. These intangibles determine why two companies in the same industry with similar earnings might have vastly different market values. We synthesized a number of studies on intangibles into an Architecture for Intangibles that explains how leaders increase confidence in future earnings:

Figure 3: Architecture for Intangibles 36

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These intangibles define what leaders must do to build capabilities that investors value. We found that intangibles exist in both up and down markets. • Keep our promises: The organization has a track record of delivering earnings in a consistent manner • Create a clear, compelling strategy: There is a shared direction about what we will win in the industry • Align core competencies: We have developed targeted core competencies that are consistent with our strategic direction • Enable organization capabilities: We have distinct social capabilities that allow us to win through our people and organization. Organization results: Capitalizing on Capabilities About a year after the publication of How Leaders Build Value, we published an article, “Capitalizing on Capabilities” in the Harvard Business Review, June 2004 that defined, identified, and operationalized organization capabilities. Organization capabilities are the fourth level of the Architecture for Intangibles. We had a fondness for these issues because we realized that organization capabilities are the deliverables of strategic HR and because they have a direct line of sight to improving market value. Leaders at companies like GE, Singapore Airlines, P&G and many others discovered how to increase investor confidence by building capabilities of leadership, talent, culture, and customer connection. In this work, we suggested that once leaders have defined strategy, they should create organization capabilities that enable and sustain that strategy. These capabilities outlast any individual leader, management event, or HR practice.

In particular, we wanted to look at internal organization capabilities from the outside/ in. For example, HR at Intercontinental Hotels sponsored an “Organization (or intangibles) Audit” where they solicited feedback from not only employees and leaders, but also franchisors, key customers, analysts and institutional investors. The process of obtaining this organization level feedback and determining how to act on it was new ground. The results spoke for themselvesthey fought off a hostile takeover and were able to convince analysts that they should not continue cost cutting but invest in customer service. We continue to reflect on the capabilities organizations required to achieve sustainable success. In our recent writing, we have added to our original list the capabilities of simplification, social responsibility, and managing risk. When capabilities integrate diverse HR practices, and when they are linked to customer expectations, they build long term sustainability. Customer Results: Leadership Brand As we turned to the customer results, we began to focus on the importance of a brand that distinguishes a firm by making and acting on promises to customers. We liked the metaphor of brand because it is so clearly tied to business results. As a marketing concept, brand starts with the customers. Traditionally individual competencies for leadership are defined exclusively inside the company by interviewing high vs. low performing leaders and then linking the identified competencies to strategy execution. The more we started with the firm’s brand and the identity of the firm in the mind of the customer, and worked to identify leadership behaviours consistent with that external brand, the more we were sure that we had struck gold. We captured our thinking with two conceptual shifts: April | 2009 NHRD Network Journal

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1. Individual (focus on the leader as a person) vs. Organizational (focus on leadership as a capability) 2. Inside the Firm (focus on what happens inside the person or the firm) versus Outside the Firm (focus on customer and investor expectations)

desired customer experience whenever they touch the customer. To do this, the firm must not only build good individual leaders, but must develop leadership as an organization capability, recognized inside the firm and also by the market.

FIRM BRAND

These two shifts are shown in the following figure:

External

Celebrity Celebrity Leaders Leaders

Leadership Brand : Leadership Brand:

Internal

Competent CompetentLeaders Leaders

Leadership Systems Systems Leadership

Figure 4 Competent Leaders: As we’ve pointed out before, this is where most companies spend their time - trying to determine the knowledge and skills of the individual leader - and is an important quadrant. Leadership Systems: Aligning selection, development, compensation and retention systems so integrated and helpful to leaders. Celebrity Leaders: Famous leaders who are known to customers and investors help by drawing attention to the firm- think Steve Jobs or Bill Gates. Leadership Brand: Leaders at every level who are recognized both by employees as well as customers and investors, for their ability to deliver results in a manner consistent with firm brand identify. Confidence in future drives price: earnings multiple and higher market value. Leadership brand occurs when external customer expectations are translated into internal leadership behaviours, so that, leaders ensure employees deliver the 38

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(How a firm wants to be known by customers)

CUSTOMER EXPERIENCE

LEADERSHIP DIFFERENTIATIONS

Figure 5 An early adopter of these ideas was ADIAthe Abu Dhabi Investment Authority- the largest sovereign wealth fund in the world. ADIA has identified three “cultural pillars” describing their desired firm brand: 1.

Effective collaboration

2.

Prudent Innovation

3.

Disciplined Execution

This perspective guides HR practices as well as leadership development initiatives. HR practices such as selection, development, performance management and retention must all integrate around effective collaboration, prudent innovation and disciplined execution. As action learning projects are identified for emerging Emirati leaders, they are also structured to deliver the cultural pillars or firm brand elements: • Effective Collaboration — Each project will be sponsored by a member of the Administration Committee and staffed by 2-3 participants in the cohort. In this way, collaboration occurs among the people on the project and between the project team and the senior executive.

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Figure 6 In addition, projects that cross departments are identified, to ensure collaboration across organization boundaries. • Prudent Innovation — This cultural capability can be developed by scoping the project so that it delivers a level of impact on the numerator or the denominator e.g. $150,000 impact. • Disciplined Execution — Tight time frames ensure disciplined execution. Therefore, each project must be completed in 8, 10 or 12 weeks. Each project must also be measured for impact and a short white paper written that describes what the project intended to accomplish and key learning by the team. This information is made available to future cohorts.

for Leaders (published by Fortune every 2 years) we discovered that leadership brand may be created by 6 integrated steps:

In our consulting practice and in our research with Hewitt on Top Companies

We are currently working to further understand employee results in two ways.

We attempt to link customer expectations to leadership actions so that employees could see a line of sight from what they did to what customers expect. Employee Results: Managing Talent and Abundance We have written indirectly about employee results by helping frame the ways in which the HR function can deliver value (HR Value Proposition, Harvard Business Press, 2005). When HR departments, practices, and professionals align their work with the goals of the company and with the customers, HR builds employee commitment.

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First, we have synthesized the key insights that general managers should know about talent. To do this, we have created a talent menu of 10 things, which a general manager should understand, to build better talent. These include defining, assessing, and investing in talent, as well as managing diversity, matching people and position, and measuring talent. Second, we are working to further clarify how people make meaning at work. While employees may be competent (able to do their job) and committed (willing to work hard), when they also feel a sense of contribution or meaning, they are more productive. We call this creating the abundant organization and draw insights into this phenomenon from multiple disciplines like positive psychology, demographics, high performing teams, commitment, and social responsibility. We clearly believe employee results matter and deserve attention, but to date we have focused on leadership on investor, organization, and customer results. Leadership Code: Back to the Basics During 2008, we realized that we really had not impacted how the majority of firms did leadership. Rather than fight this tide, we decided to do integrative and synthesizing research around attributes that would allow leadership practitioners to move on and join us in our quest to integrate attributes with results.

¶

Faced with the incredible volume of information about leadership, we asked our colleague at The RBL Group, Kate Sweetman to join us and then turned to recognized experts in the field who had already spent years sifting through the evidence and developing their own theories. These thought leaders had each published a theory of leadership based on a long history of leadership research and empirical assessment of what makes effective leadership. Collectively, they have written over 50 books on leadership and performed well over 2,000,000 leadership 360’s. They are the “thought leaders” of this field.¶ In our discussions with them we focused on two simple questions whose answers had always been elusive: 1. What percent of effective leadership is basically the same? 2. If there are common rules that all leaders must master, what are they? We wanted to understand if an effective leader at, say, Walmart in any ways resembles an effective leader at Virgin Airlines? Does an effective leader in a bootstrapping NGO in any way resemble an effective leader at the famously bureaucratic United Nations? Does an effective leader in an emerging market resemble an effective leader in a mature market? Does an effective leader in

These generous thought leaders included: Jim Bolt (working on leadership development efforts): Richard Boyatzis (working on the competency models and resonant leadership); Jay Conger (working on leadership skills as aligned to strategy); Bob Fulmer (working on leadership skills); Bob Eichinger (work with Mike Lombardo to extend work from Center from Creative Leadership and leadership abilities); Marc Effron working on large studies of global leaders; Marshall Goldsmith (working on global leadership skills and how to develop those skills); Gary Hamel (working on leadership as it relates to strategy); Linda Hill (working on how managers become leaders, and leadership in emerging economies); Jon Katzenbach (working on leaders from within the organization); Jim Kouzes (working on how leaders build credibility); Morgan McCall (representing Center for Creative Leadership); Barry Posner (working on how leaders build credibility); Jack Zenger and Joe Folkman (working on how leaders deliver results and become extraordinary).

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organized crime in any way resemble an effective leader in organized religion? Does an effective leader in a Swiss pharmaceutical company share any underlying characteristics with an effective leader at Google? To the first question, the experts varied as they estimated that somewhere in the range of 50 to 85% of leadership characteristics were shared across all effective leaders. The range is fairly broad, to be sure, but consistent. From the body of interviews we conducted, we concluded that 60-70% of leadership effectiveness would be contained in a Leadership Code if we could crack it. Synthesizing the data, the interviews, and our own research and experience, a framework emerged that we simply call the Leadership Code. In an effort to create a useful visual, we have mapped out two dimensions (Time and Focus) and placed what we are calling Personal Proficiency (self management) at the center as an underlying support for the other two. This figure synthesizes the Leadership Code and captures the five rules of leadership that capture leadership DNA. These five rules can be readily applied to any group of leaders:

Rule 1: Shape the future. This rule is embodied in the strategist dimension of the leader. Strategists answer the question “where are we going?” and make sure that those around them understand the direction as well. They not only envision, but also can create a future. They figure out where the organization needs to go to succeed, they test these ideas pragmatically against current resources (money, people, organizational capabilities), and they work with others to figure out how to get from the present to the desired future. Strategists have a point of view about the future and are able to position their organization to create and respond to that future. The rules for strategists are about creating, defining, and delivering principles of what can be. Rule 2: Make things happen. Turn what you know into what you do. The Executor dimension of the leader focuses on the question “How will we make sure we get to where we are going?” Executors translate strategy into action. Executors understand how to make change happy, to assign accountability, to know which key decisions to take and which to delegate, and to make sure that teams work well together. They keep promises to multiple stakeholders. Executors make things happen, and put the systems

Figure 7: The Leadership Code April | 2009 NHRD Network Journal

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in place for others to do the same. The rules for executors revolve around disciplines for getting things done and the technical expertise to the get the right things done right. Rule 3: Engage today’s talent. Leaders who optimize talent today answer the question, “Who goes with us on our business journey?” Talent managers know how to identify, build and engage talent to get results now. Talent managers identify what skills are required, draw talent to their organizations, engage them, communicate extensively, and ensure that employees turn in their best efforts. Talent managers generate intense personal, professional and organizational loyalty. The rules for talent managers center around resolutions that help people develop themselves for the good of the organization. Rule 4: Build the next generation. Leaders who are Human Capital Developers answer the question, “who stays and sustains the organization for the next

generation?” Talent Managers ensure shorter-term results through people while Human Capital Developers ensure that the organization has the longer-term competencies required for future strategic success. Just as good parents invest in helping their children succeed, human capital developers help future leaders be successful. Human capital developers throughout the organization build a workforce plan focused on future talent, understand how to develop the future talent, and help employees see their future careers within the company. Human capital developers ensure that the organization will outlive any single individual. Human capital developers install rules that demonstrate a pledge to building the next generation of talent. Rule 5: Invest in yourself. At the heart of the Leadership Code – literally and figuratively – is Personal Proficiency. Effective leaders cannot be reduced to what they know and do. Who they are as human

Figure 8 42

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beings, has everything to do with how much they can accomplish, with and through other people. Leaders are learners: from success, failure, assignments, books, classes, people, and life itself. Passionate about their beliefs and interests, they expend an enormous personal energy and attention on whatever matters to them. Effective leaders inspire loyalty and goodwill in others because they themselves act with integrity and trust. Decisive and impassioned, they are capable of bold and courageous moves. Confident in their ability to deal with situations as they arise, they can tolerate ambiguity. As we have worked with these five rules of leadership, we can make some summary observations. • All leaders must excel at Personal Proficiency. Without the foundation of trust and credibility, you cannot ask others to follow you. While individuals may have different styles (introvert vs. extrovert, intuitive vs. sensing, etc.), any individual leader must be seen as having personal proficiency to engage followers. This is probably the toughest of the five domains to train and some individuals are naturally more capable than others. • Effective leaders have one towering strength. Most successful leaders have at least one of the other four roles in which they excel. Most are personally predisposed to one of the four areas. These are the signature strengths of your leaders. • All leaders must be at least average in his or her “weaker” leadership domains. It is possible to train someone to learn how to be strategic, execute, manage talent, and develop future talent. There are behaviors and skills that can be identified, developed, and mastered.

• The higher up the organization that the leader rises, the more he or she needs to develop excellence in more than one of the four domains. It is very bold to say that these five domains synthesize and summarize leadership, but we continue to believe that we have captured the essence of what attributes effective leaders need. What’s next? After a decade, we are more confident than ever about a balanced formula for leadership: attributes * results. This simple formula allows us to organize theory, research and practice of leadership. The summary of our publications in leadership can be seen in Figure 8. We know there is more to do. As we look ahead, there are more stakeholders that have results for leaders to build value for. For example, we are interested in communities and how leaders ensure social responsibility. We’re also interested in how investors, venture capitalists, private equity funds, sovereign wealth funds and others determine quality of leadership during due diligence processes. Our initial research into this area and the global economic condition suggests current approaches are relatively primitive. This future work will continue to flesh out the mix of attributes and results that characterize effective individual leaders and organization leadership capabilities. As we have done this body of work, we have better defined the importance of both leaders as individuals and leadership as systems, of both attributes of effective leaders and results of effective leadership, and of leaders serving stakeholders both outside and inside their organizations. We have many ideas that continue to build on this logic over the next decade and hope to use fewer words to have more impact. April | 2009 NHRD Network Journal

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LINKING STRATEGIC LEADERSHIP AND HUMAN RESOURCE MANAGEMENT GARY YUKL and RUBINA MAHSUD Abstract The literatures on human resources management and on strategic leadership have developed separately, and important linkages between the two subjects have not received much attention. Leaders can influence the quality of human resources in a company, and human resource specialists can improve the quality of strategic leadership by executives. We describe how HRM and strategic leadership are inter-related and how they jointly influence the financial performance of a company. About the Authors Gary Yukl is a Professor of Management at UAlbany, and his primary areas of research and teaching include leadership, interpersonal influence, and management development. He has received several awards for his research and is a Fellow of the Academy of Management and the Society of IndustrialOrganizational Psychology. Yukl is the author of many articles and books, including Leadership in Organizations (Prentice Hall, 7th edition, 2009), which is used in many countries including India. He can be reached at [email protected]. Rubiná Mahsud is an Assistant Professor in the Albers School of Business at Seattle University. Her primary areas of teaching and research include business strategy and strategic leadership. She has a Ph.D. in Organizational Studies from UAlbany and has earlier degrees in medicine and public health (including an MD). She can be reached at [email protected]. Introduction The literature on strategic leadership describes the influence of top executives on organizational processes that determine the financial performance and survival of a company. The literature on human resource management (HRM) describes practices and programs used to improve employee skills and commitment. The two literatures have developed separately without much attention to points of convergence. How top executives influence 44

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the quality of human resources, and how HRM programs influence the quality of strategic leadership are seldom examined. The purpose of this article is to examine related aspects of the two literatures that deserve more attention. Strategic Leadership and Company Financial Performance Evidence from research on top executives indicates that they have a moderate amount of influence on the bottom-line financial

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performance of a company over a period of several years (see Hambrick, 2007; Mackey, 2008; Yukl, 2009). However, limited progress has been made in explaining how top executives actually influence the financial performance of a large organization. The explanations provided in much of the leadership literature involve leader influence on employee confidence and commitment to an appealing vision for the future. For example, several survey studies examined the relationship between CEO transformational or charismatic leadership and indicators of company performance (e.g., Angle, Nagarajan, Sonnenfeld & Srinivasan, 2006; Waldman, Javidan, & Varella, 2004). Several comparative case studies have examined the influence of top executives on the competitive strategy and the processes used to make strategic decisions (e.g., Finkelstein, 2003; Tushman & O’Reilly, 1996). Other leadership scholars have described how top executives can influence organizational processes and aspects of structure that improve efficiency and adaptation, which are two primary determinants of long-term prosperity for an organization (e.g., Ebben, & Johnson, 2005; Yukl, 2008; Yukl & Lepsinger, 2004). A company is highly efficient when essential operations are conducted in a way that minimizes costs and avoids wasted effort and resources. Efficiency is especially important for the performance of a company when the competitive strategy is to offer its products and services at a lower price than competitors. Top management can improve efficiency by redesigning work processes, applying new technology that is relevant for improving work processes, finding ways to reduce costs for materials, supplies, labor, and energy, and coordinating unit activities to avoid unnecessary activities and wasted resources. The financial performance of a company also depends on responding in appropriate

ways to external threats and opportunities. Adaptation is especially important when the external environment is volatile and uncertain, and for an organization that emphasizes unique, leading-edge products or services designed to satisfy the changing needs of customers and clients. Top management can improve adaptation by carefully monitoring the external environment and tracking changes in customer preferences, economic conditions, competitor actions, and technological discoveries relevant to the firm’s processes, products, or services. Adaptation is also improved when top management has a flexible strategy that will facilitate rapid change, and there are effective processes for acquisition, dissemination, and application of relevant new knowledge (Yukl, 2008; Yukl & Lepsinger, 2004). HRM and Company Financial Performance The literature on human resources management is primarily concerned with the recruitment, selection, training, compensation, and retention of employees. Examples of widely used programs include recruitment and selection, orientation and team building, mentoring and career counseling, training and development, talent management, succession planning, compensation and benefits, and employee empowerment. In much of the recent literature on strategic human resources, talented employees (sometimes referred to as “human capital”) are viewed as a source of competitive advantage and a way to improve bottom line results (Hatch et al., 2004; Hitt & Ireland, 2002). Several studies found that companies with effective human resource management practices and programs have better financial performance (e.g., Becker & Huselid, 1998; Bowen, & Ostroff, 2004; Huselid & Schuler, 1997; Richard, & Johnson, 2001; Park, Mitsuhashi, Fey, & Bjorkman, 2003). April | 2009 NHRD Network Journal

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An example of this type of research is the study by Singh (2003), which tested the relationship between HRM practices and firm performance in a sample of 84 Indian firms selected across range of industries. Using data from the Business Today 500 database, Singh examined the impact of HRM practices such as manpower planning, recruitment, selection, evaluation, compensation, employee training, and staffing on objective measures of firm performance such as return on assets (ROA) and sales growth. After controlling for firm variation and industry effects, HRM practices were significantly related to these measures. Singh concluded that through the use of good HR practices, it is possible to have a more competent and committed workforce, which in turn provides a source of sustainable competitive advantage. Research on the impact of HRM programs and practices on a firm’s financial performance have made only limited progress in identifying explanations for the relationship. The programs are often very costly, and a company can have poor financial performance despite elaborate HRM programs and employees who are highly skilled and motivated. HRM programs and practices are unlikely to be effective unless they are consistent with the firm’s competitive strategy. There also is some evidence that HRM practices should be comprehensive and mutually compatible (Ichniowski & Shaw, 1999). The role of leaders is seldom examined closely in the HRM literature, but it is obvious that leaders at all levels in an organization can influence the quality of human resources. How Leaders Can Improve Human Resources Flexible leadership theory describes how leaders can enhance employee commitment and skills in ways that will eventually improve efficiency, adaptation, 46

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and financial performance (Yukl, 2008; Yukl & Lepsinger, 2004). Many studies during the past half century have identified types of leadership behavior that can enhance employee confidence, cooperation, and effort. Examples include providing support and encouragement when an employee is discouraged or upset by a difficult problem, providing instruction and coaching to an employee who needs it, providing recognition for important contributions and achievements by an individual or team, empowering a competent employee or team to determine the best way to do a task, and delegating new responsibilities or more authority to a competent employee. How leaders can improve employee skills has received less attention in the leadership literature, but examples of relevant behaviors include: providing clear explanations about job responsibilities and work procedures to new or inexperienced employees, providing coaching and feedback to an individual or team, encouraging employees to attend relevant training activities, facilitating attendance at training programs, making developmental assignments to learn new skills, and providing opportunities to use newly learned skills. Leaders can also improve the quality of human resources by their influence on HRM programs and management systems (Yukl, 2008; Yukl & Lepsinger, 2004). This type of leader influence is sometimes called indirect leadership, because no direct interaction with followers is necessary to influence their attitudes and behavior. Top executives in an organization usually have the authority to design or modify human resource management programs. It is their responsibility to ensure that the HRM programs are cost effective, compatible with each other, and consistent with the firm’s competitive strategy. Middle and lower-level managers can help to

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implement and support the HRM programs, and they can help to evaluate the programs and suggest improvements. Direct behaviors and changes in HRM programs are complementary forms of leader influence. The direct behaviors can be used to facilitate the implementation of new programs and their successful use. For example, a new training program is more likely to be successful when managers encourage subordinates to attend the program and provide opportunities to use newly learned skills on the job. Human resource management programs can enhance the effects of direct leadership behaviors. For example, encouraging innovative thinking is more likely to increase the development of new products and processes, when an organization has a well-designed program to facilitate and reward innovation. However, programs and structures can also limit the use of leadership behaviors or nullify their effects. For example, it is difficult to empower subordinates when there are elaborate rules and standard procedures. Human resource management programs and systems can also serve as substitutes for some types of direct behaviors, and they provide a way to ensure that common activities are carried out in an efficient and uniform way across subunits. For example, training of generic skills that are relevant for all employees is likely to be more efficient and consistent if provided by expert trainers as part of a company training program rather than by many individual managers in the company. Despite the evidence that HRM programs can improve financial performance, many companies fail to achieve the potential benefits (Bassi & McMurrer, 2007; Pfeffer, 2005). One reason is that some top executives still regard human resources as a cost rather than an asset, and they view HR functions as a low-level staff

responsibility that can be outsourced or minimized. It is essential for top executives to understand the potential benefits from HRM programs and how these benefits can be achieved. To improve consistency between HRM programs and the firm’s competitive strategy, the HR director should be included as a full-fledged member of the top-management team who participates in the process of making strategic decisions for the firm. Human capital is related to efficiency and adaptation in complex ways, and a good understanding of these interdependencies is required to balance the tradeoffs and find synergies (Yukl, 2008). It is important to avoid any adverse consequences that can nullify the potential benefits of HRM programs and practices. For example, it is usually expensive to attract, develop, and retain talented people, and improvements in human capital will reduce overall efficiency unless the additional expenses are exceeded by greater benefits from enhanced performance. It is also important to ensure that HRM programs and practices are implemented effectively (Gratton & Truss, 2003; Khilji & Wang, 2006; Richard & Johnson, 2001). When a popular HRM program is poorly implemented, the likely result is higher costs without most of the desired benefits. To assess the utility of human resource management programs and practices, top management should find ways to measure their short-term and long-term costs and benefits. How HRM Can Improve Strategic Leadership Up to this point, the focus of this article has been on the influence of leaders on HRM, but reverse causality also occurs. The importance of human resource management systems for improving the quality of leadership has not been clearly acknowledged in much of the leadership April | 2009 NHRD Network Journal

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literature. Most leadership theories focus on the skills and actions of individual leaders without considering the organizational processes by which leaders are selected, trained, and developed. The quality of top executives who are promoted from within the organization is highly dependent on programs and practices involving leadership development, performance appraisal, succession planning, and executive selection. The research on human resource management has identified effective practices for developing and assessing leadership competencies, but many organizations fail to apply this knowledge systematically to improve strategic leadership by top executives (McCall, 1998). Another contribution of human resource management programs to strategic leadership is to provide the information needed by top management to assess the organization’s human capital. The need for consistency between management programs and the competitive strategy is not only a matter of changing programs when the strategy changes. An effective competitive strategy depends in part on the core capabilities of the organization, and human capital is often one of them. The diversity of potential strategies is increased

when an organization already has talented people who are able to support a new strategy requiring different skills than the current one, or when such employees can be hired without excessive cost. A welldesigned human resource system can track employee capabilities that are relevant to the challenges facing the organization. Conclusions There is a growing recognition of the need for better integration of the literatures on human resource management and strategic leadership. The importance of human capital as a determinant of firm performance is gaining recognition in the strategic leadership literature, and the need for human resource programs that support a firm’s competitive strategy is gaining recognition in the human resource management literature. Human resource management and strategic leadership are related in many ways, and there is much potential for mutual enhancement. More research is needed to explore the complex relationships and discover how to increase the joint contribution of leadership processes and human resource management programs to a company’s long-term financial performance.

References Angle, B. R., Nagarajan, J. N., Sonnenfeld, J. A., & Srinivasan, D. (2006). Does CEO charisma matter? An empirical analysis of the relationships among organizational performance, environmental uncertainty, and top management team perceptions of CEO charisma. Academy of Management Journal, 49 (1), 161-174. Bassi, L., & McMurrer, D. (2007). Maximizing your return on people. Harvard Business Review, March, 115-123. Becker, B. E., & Huselid, M. A. (1998). Human performance work systems and firm performance: A synthesis of research and managerial implications. Research in Personnel and Human Resource Management, 16, 53-101. Bowen, D. E. & Ostroff, C. (2004). Understanding HRM-firm performance linkages: The role of the “strength” of the HRM system. Academy of Management Review, 29 (2), 203-221. Ebben, J. J., & Johnson, C. A. (2005). Efficiency, flexibility, or both? Evidence linking strategy to performance in small firms. Strategic Management Journal, 26, 1249-1259. Finkelstein, S. (2003). Why smart executives fail. New York: Portfolio. Gratton, L. Truss, C. (2003). The three dimensional people strategy: Putting Human Resources Policies in to Action. Academy of Management Executive, 17(3), 74-86. Hambrick, D. (2007). Upper echelons theory: An update. Academy of Management Review, 32 (2), 334-343.

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Hatch, W. N., & Dyer, H., Jeffrey, . (2004). Human capital and learning as a source of sustainable competitive advantage. Strategic Management Journal, 25, 1155-1178. Hitt, M. A., & Ireland, R. D. (2002). The essence of strategic leadership: Managing human and social capital. Journal of Leadership and Organizational Studies, 9 (1), 3-14. Huselid, A. M., & Schuler, S. R. (1997). Technical and strategic human resource management effectiveness as determinants of firm performance. Academy of Management Journal, 40(1), 171-188. Ichniowski, C., & Shaw, K. (1999). The effect of human resource management systems on economic performance: An international comparison of U.S. and Japanese Plants. Management Science, 45 (5), 704-721. Khilji, S. & Wang, X. (2006). ‘Intended’ and ‘implemented’ HRM: The missing linchpin in strategic human resource management. International Journal of Human Resource Management, 17 (7), 1171-1189. Mackey, A. (2008). The effect of CEOS on firm performance. Strategic Management Journal, 29, 1357-1367. McCall, M. W. Jr. (1998). High flyers: Developing the next generation of leaders. Boston, MA: Harvard Business School Press. Park, J. H., Mitsuhashi, H., Fey, F. C., and Bjorkman, I. (2003). The effect of human resource management practices on Japanese MNC subsidiary performance: A partial mediating model. International Journal of Human Resource Management, 14(8), 1391-1406. Pfeffer, J. (2005). Producing sustainable competitive advantage through the effective management of people. Academy of Management Executive, 19 (4), 95-106. Richard, C. O. & Johnson, B. (2001). Strategic human resource management and firm performance. International Journal of Human Resource Management, 12(2), 299-310. Singh, K. (2003). Strategic HR orientation and firm performance in India. International Journal of Human Resource Management, 14 (4), 530-543. Tushman, L. M., & O’Reilly III, A. C. (1996). Ambidextrous Organizations: Managing evolutionary and Revolutionary change. California Management Review, 38 (4), 4-28. Waldman, D. A., Javidan, M., & Varella, P. (2004). Charismatic leadership at the strategic level: A new application of upper echelons theory. Leadership Quarterly, 15, 355–380. Yukl, G. (2008). How leaders influence organizational effectiveness. Leadership Quarterly, 19, 708-722. Yukl, G., & Lepsinger, R. (2004). Flexible leadership: Creating value by balancing multiple challenges and choices. San Francisco, CA: Jossey Bass/Wiley. Yukl, G., & Lepsinger, R. (2005). Why integrating the leading and managing roles is essential for organizational effectiveness. Organizational Dynamics, 34, 4, 361-375. Yukl, G. (2009). Leadership in organizations, 7th edition. Upper Saddle River, NJ: Prentice-Hall.

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Creators par excellence of wealth for stakeholders, visionaries in their own right with entrepreneurial flair, and role models all rolled into one are contributors to this section. It has chief executives offering their deep insights on leadership, as they perceive it. They are leaders, who at the helm of their organizations endeavour to create lasting value and shared vision. The buck stops here! Anu Aga (Thermax), Sandeep Bakhshi (ICICI Lombard), Jaspal Bindra (Standard Chartered Bank) and B Santhanam (Saint Gobain) need no introduction, and their articles reflect deep understanding of what it means to lead successfully. Jim Collins (of the classic Built to Last fame) contributed an article he wrote on the ten best CEOs, hugely relevant even today. Peter Capelli, Harbir Singh, Jitendra V Singh, and Michael Useem (Wharton School) had joined hands with NHRD to unravel the DNA of Indian business leadership, an abstract of which is also featured in this issue.

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WHEN DOES A CEO BECOME A LEADER? ANU AGA Abstract Is being a CEO not synonymous with being a leader? May be not. This article further explores the ‘differentiating’ factors of leadership that a typical CEO may need to develop or nurture. It is when a CEO’s sensitivity is fine-tuned to local and global issues, even though they may not have an immediate and direct impact on his business, that he will grow in leadership capabilities. About the Author Anu Aga is on the Board of Thermax Limited, the Rs. 3000-crore leading Indian player in energy and environment management. She retired as chairperson of the company in October 2004. She has been very active in various national and local associations like Confederation of Indian Industries (CII) and had served as the Chairperson of CII’s western region. She has written extensively and given talks on the subjects of corporate governance, corporate social responsibility, role of women and education. Ever since her retirement, Anu Aga spends most of her time towards social causes. Her area of interest is education and is keenly involved in an organization called Akanksha, which promotes education for the underprivileged children in Mumbai and Pune. In the US, they conduct a weekend seminar called Renaissance Weekend, where high profile people from politics, arts, education, and industry are invited. Even Nobel Prize winners, sometimes, participate in the seminar. Towards the end of the session, a few participants are asked to give a speech of no more than three minutes and have to imagine that as soon as they deliver the talk, they would drop dead. Imagine a situation like that, and what would a typical CEO say just three minutes before he/she says goodbye to the world! Looking at the context of today’s business – financial meltdowns brought about by greed and unethical behaviour, scams and frauds, an atmosphere of suspicion and cynicism about business itself – it is doubtful if he/she would feel comfortable 52

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at all. Even in the best of times, when business was booming and our growth rates were galloping, what could be the best that a successful CEO can say – that he/she could add profit quarter after quarter; that he/she was loved by shareholders? What will he/she say about how his/her own employees, his/her family and the society saw him/her and what about the legacy he/she is leaving behind? One good outcome of this current financial meltdown is a reappraisal of everything that was once considered sacrosanct. When the edifice of the modern financial system is exposed to be hollow and moth eaten, it is only natural the captains of that system are subjected to intense scrutiny. The one phrase that we hear often is ‘the failure of

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leadership’. It is true the term connotes a wider universe, that of societal leadership itself. What the world experiences today is a failure of collective leadership on all fronts – politics, education, development initiatives, humane technologies and of course, sustainable business practices. Ever since the end of the Cold War era with its polarized ideologies, when state-controlled economies including ours opened up, business was seen in a new light and people looked to captains of industry for creating wealth and for shouldering the responsibilities of development. Today, it is that faith and trust that have crumbled and unfortunately, much that has been built in terms of goodwill and reputation also has been dismantled. A world that discarded the failure of state-run, regulated economies is, today, questioning the basic principles of capitalism itself. And rightly so. Can we sanction or allow this blatant display of unchecked, unregulated capitalism that has destroyed wealth, ruined lives and brought misery and cynicism around the world? Just as there is a growing tide of popular resentment about politicians, can we demand more from our CEOs? Can they rebuild a humane capitalism that can help to generate and share wealth, and eventually move towards interdependence and harmony? Can our CEOs grow to be true leaders who can give those three-minute speeches with a sense of fulfillment? It is now clear that being a CEO is not synonymous with being a leader. There are many more aspects of leadership that a typical CEO may need to develop or nurture. First and foremost, there is the crucial issue of organizing one’s own life around a core of calmness and abiding values, before one can lead others. From my own experience, I have realized it is when she is able to lead her own life with a sense of wellbeing that a CEO can aspire

to lead others, become a real leader. While life will keep on presenting hurdles and challenges, it is an important attribute of the leader to face the world with equanimity. One needs to find one’s own centre – a calm and still zone within. In our personal lives, all of us face situations when we need to deal with loss and failure. We need to use them as opportunities to tap strength from within. Vipassana, a Buddhist meditation discipline taught me that unless we tap the personal power which is within each of us, we cannot lead from positional power – the power that comes from our office and title. With centeredness, we begin to appreciate the uniqueness of our own being and through that process learn to respect the individuality of every person. Once we practice this, we don’t see people as faceless categories – employees, shareholders and so on. Getting tuned to our inner stillness is not some esoteric exercise meant only for yogis or mystics. Eckart Tolle in his book “Stillness Speaks” says, “When you lose touch with inner stillness, you lose touch with yourself. When you lose touch with yourself, you lose yourself in the world.” When you operate from your calm centre, you are no longer burdened with the responsibility of having to be a superman or a superwoman. You realize the power of what you can achieve, but more importantly, the limits of what is possible for a single individual. Then you see no problems in asking for help. A leader has to know when the organization is out of its depth and needs help; and that she herself need not feel small or ashamed to ask for help. This also means creating shared leadership. Most organizations have been hierarchical with a strong central leader managing through a distinct chain of command. This worked in the past, but today’s interdependent world of rapid April | 2009 NHRD Network Journal

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changes and cultural diversity demands that leaders allow situational leadership to emerge. A CEO becomes a leader when he/ she facilitates several leaders to emerge from within the organization. Such a clear-eyed and realistic approach will see the importance of creating a nurturing environment for others. Attracting and retaining talent is a big challenge that companies face today. Apart from being paid well, the younger generation would expect that there is room for them to make a difference. It is all about creating a stimulating and vibrant environment where employees participate with enthusiasm and feel the glow of fulfillment when they know something meaningful has been achieved at the end of a working day. Can we business leaders create an ‘entrepreneurial’ culture that gives employees this sense of fulfillment, where without necessarily owning shares, they experience a strong sense of belonging and have a sense of purpose? In our own case, Thermax grew because there was ample opportunity for individuals to come up with an idea and make it a success. Entrepreneurial culture also means having tolerance for failures. As expected, some of our initiatives failed. During a critical phase, when the company’s performance deteriorated, our tolerance for mistakes went down but we are once again re-creating our innovative and entrepreneurial spirit. Without tolerance for genuine mistakes, a leader cannot lead a vibrant organization. Most of you must be familiar with the story about two masons who were asked what they were doing. One said he was laying bricks, while the other replied that he was helping build a cathedral. Purpose stems from how you define work. For example, in my own company, 54

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employees can think they are making and selling products like boilers, chillers or pollution equipment or they can look upon it as being in the energy and environment field, which addresses the issues of global warming. If they are connected to a larger vision, they will be energized. And it is for the leader-CEO to do this. Vibrancy and interdependence can be enhanced if a leader consciously encourages diversity of gender, culture, region and religion. Formulating and following an affirmative policy which includes women and marginalized members of the society is not about doing social work, and it has been proved that in a globalized environment, diversity adds to better decision making (since it includes different points of view) and enhances competitiveness. I mentioned earlier how today’s CEOs are often reduced to being mere number crunchers. Living such a life, it is natural that the cultures they create within organizations also become unidimensional and narrow. Is an organization’s aim only financial success or is human wellbeing the real purpose of business? I am convinced that human wellbeing should be at the top of our agenda. If that is the case, we will need to question many practices that we have so far taken for granted. Does success at work carry along with it, a huge price tag whereby you end up in life as a failure, incapable of meaningful relationships with your loved ones? Can we business leaders take on the wider responsibility of helping our employees achieve a greater sense of balance and wellbeing? As a CEO, a person is responsible for the financial success of his organization. However, as a leader, he/she is not only responsible for the success of his organization but he/she also needs to

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stand for a wider world – the community and the society at large. While the first responsibility as a corporate leader is to make his/her organization financially strong and sustainable, that is not enough. We have to reach out to the larger community from which we draw all our resources. Very often, corporates argue that they are doing their bit by creating job opportunities and paying taxes. I believe that as the corporate sector is an integral part of any community, they have to be sensitive to its needs. There is a striking paragraph I read somewhere stating that the business of business is to generate growth and profits or else it will die; however, if that is the sole purpose of business, then also it should die for it no longer has a reason to exist. This is very applicable to a country like India where poverty is a compelling reality and the gap between the rich and the poor is widening. It is imperative that the corporate sector with its managerial resources, financial muscle and technical competence reaches out to the needy and make growth inclusive. Apart from a sense of justice, business needs to do this in its own enlightened self-interest. Corporate social responsibility is not just a fashionable thing to do but needs serious commitment from leaders. We also need to be responsive and responsible stewards of life on earth. We owe it to our future generation and cannot selfishly deplete the limited resources that this earth has to offer. Business leaders have a direct role to play when it comes to wider concerns such as global warming and climate change, the extinction of species and cultures, the emergence of drug-resistant diseases. The disastrous consequences of the world’s climate change offer just such an opportunity to link business with the

wellbeing and security of nations and future generations. Unless we step out of the paradigms of limitless growth based on unchecked exploitation of hydrocarbon fuels and curb our wasteful energy use patterns, we would soon be crossing the point of no return. Can we as world leaders contribute in our individual ways to reduce our energy intensities and reduce our carbon footprints? When a CEO’s sensitivity is fine tuned to local and global issues even though they may not have an immediate and direct impact on our business, then she will grow in leadership capabilities. For this she will have to come out of the culture of silence. In all societies, every day there are instances of social injustice and violations of human dignity. It might not directly concern a CEO, but as a leader how do you react to injustice, be it communal violence or atrocities towards the downtrodden that flare up from time to time in different parts of our country? It will be a test of leadership for her whether she chooses to stay forever in comfort zones and like an ostrich pretend that it is not our business to intervene, or decide to take an active stand and be prepared to face the consequences. Just as we are tuned to listening to our shareholders, every night before we sleep, should we not also take care of that small voice – of our own conscience? Amartya Sen warned us that “Silence is a big enemy of social justice”. In these times of uncertainty and constant change, we need a constant set of values, a strong ethical sense to anchor us. In societies where corruption is rampant, the leader through his/her personal example has to show the way. I cannot be prescriptive about values but each leader will have to decide where to draw the line. Life can be the most potent teacher, provided we heed the message it is trying April | 2009 NHRD Network Journal

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to convey. I would like to share a profound lesson I have learnt: To emerge as a leader you have to invest in yourself. Reading or attending programs or gathering intellectual information can add to your knowledge and skills but not to your wisdom. I strongly believe skills can be hired but wisdom has to be a key attribute of a leader. Wisdom is your unique and personal learnings from life as it unfolds. In a lighter vein, it has been said that intellect tells you that a tomato is a fruit; wisdom tells you not to use it in fruit-salad.

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Wisdom also means realizing the transitory nature of positions and the fact that institutions will continue even as individuals come and go. A leader plans her succession so that there are no hiccups and there is smooth transition. “Succession” seems such a logical, good idea but it means coming to terms with the fact that you are dispensable. Leadership also means accepting and coming to terms with the fact that our stay on this earth is for a short duration, our roles dispensable and however important we imagine we are, our impact is inconsequential.

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EFFECTIVE LEADERSHIP IS DRIVEN BY STRONG VALUES SANDEEP BAKHSHI Abstract Leaders are the catalysts through which strategy translates itself into the organization. Therefore, the need for developing leadership potential is evidently undisputable. Yet, leadership cannot be taught but can certainly be learnt. The article posits that the key to leadership development lies in nurturing strong organizational values. The leaders must consistently demonstrate these values and bear the responsibility of instilling these throughout the organization. About the Author Sandeep Bakhshi is the Managing Director & CEO of ICICI Lombard, a 74:26 joint venture of ICICI Bank and Fairfax Group and one of the eight companies which started operations after the sector opened up to private sector participants in the year 2001. Bakhshi, an Engineer and an MBA by education, joined ICICI in 1986 in the project financing department and worked there till 2001 before joining ICICI Lombard in January 2002. Effective leadership is always a significant element in the study of success. This becomes even more relevant in areas such as business, sports, politics and war which involve leading teams or leading a large number of people. As a result, there are many definitions of leadership depending on the context. Most definitions revolve around describing the ‘role’ of a leader as one who defines a vision and aligns and motivates a group of people to achieve the same. However, more significantly, it is also seen that the influence of a leader is not always dependent on title or formal authority. There is clearly a behavioural aspect in this insight into leadership and unlike management, leadership thus flows from the core of a personality - it cannot be taught although it may be learnt. Therefore the question that arises is how one can empower people to spontaneously

take on the leadership mantle towards achieving a particular result. From a business perspective the objective would always be to develop leadership qualities across the width and depth of the organization and to do so consistently over a period of time. The answer lies in the development and nurturing of a shared set of core values. Values exert a major influence on the behavior of an individual and serve as broad guidelines in all situations. They cut across hierarchies and functions and form common bonds that hold groups together at an emotional level. Strong values are seen to be inter-related with strong leadership and this is pertinent in every context. Organizations that espouse a distinct set of relevant values and live by them are able to carve out a definite April | 2009 NHRD Network Journal

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position for themselves in the market. Brands that engage with their target audience through a consistent set of values that are built over time have a larger customer franchise than others. Individuals at all levels who stand for a clear set of positive values are respected by everyone. It is essential that the foundation of an organization’s DNA be built on a set of anchor values that are relevant in the context of the company’s business model and the industry it operates in. At ICICI Lombard we have defined a specific set of core values in the context of our business. a. Positivity: In a world full of uncertainties a positive approach will lead to positive results and this reflects in our communication and behaviour with customers. b. Sensitivity: Stepping into the customer’s shoes sensitizes us to their emotions and situational context. This enables a response that is appropriate for the situation and helps build a superior customer experience. c. Integrity: Integrity is about honesty, sincerity and being of sound moral principle. It is also about keeping promises and fulfilling expectations where each function within the organization comes together seamlessly as an integrated whole to deliver a consistent service proposition to customers. d. Humility: True leadership in the service industry requires the humility to keep one’s ego sublime and to serve others. Leaders recognize that they are in business because of customers and are agile thanks to competitors. e. Responsiveness: We are in the business of distress management and our customers expect us to respond to their needs. A quick response environment is a source of differentiation and creates 58

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customer loyalty as well as strong word of mouth. f. Transparency: Openness in all communication is necessary to earn the trust of both internal and external customers. Interactions underpinned by transparency go a long way in building credibility in a business such as insurance where each transaction is bound by a legal contract. Leaders must consistently demonstrate the organization’s core values and they shoulder the responsibility of instilling these throughout the business. This comes to the fore in various situations that are faced on a day-to-day basis that indeed put leadership to the test. Some of these situations are elaborated below to highlight the impact of baseline values on the leadership imperative. Recruitment: Proper recruitment of new resources is the starting point of building the organization’s value system and is in line with the adage that well begun is half done. Employees who have been filtered through the sieve of core values form the bedrock of a values-driven organization. Their ability to adapt to the company’s culture and beliefs is that much easier and helps in finally building a team that works well together. Humility and respect for the individual enables the team at ICICI Lombard to work collaboratively in a multi-functional environment towards a common goal. Building leadership depth and developing leaders: One determinant of a true leader is the ability to build bench strength and a strong second level of leadership. This is only possible when the individual is secure with his own value system and is able to inculcate the same in a positive manner in the team. This also requires constant communication with a bias towards ongoing mentoring as well as coaching. Rewards, recognition and growth that are

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usually linked to performance must also be supported by a demonstrated alignment to the core set of values. A high-performing employee who is seen to constantly violate the core values would have a limited future in the organization. Decision making: Decisions on key issues that the businesses encounter are taken on the assessment of the choices vis-à-vis their alignment with core values. Hence both the intended and unintended consequences of the decision are owned by the leadership team. This also ensures that there are no significant post-decision debates and the entire organization is aligned towards delivery rather than discussion. Moments of truth: A service-driven organization is faced with thousands of customer interactions on a daily basis across touch points. Each of these is a moment of truth and could have an electronic interface or a human interface. Experience suggests that situations involving a human interface with a customer have a higher chance of creating both a positive as well as a negative impact on the brand. Consistency in the customer experience at these moments of truth builds a coherent and strong brand. The challenge lies in ensuring the desired service delivery on every occasion especially where human behaviour is involved. Furthermore, the challenge is compounded exponentially as an organization scales up. Training, control and monitoring help in building the desired service delivery model and ensure a base level customer experience. However, effective differentiation leading to brand leadership can only be developed through an emphasis on the core values and their guiding principles. Sensitivity and responsiveness to a customer need requires a behavioural response that must come from within. Integrity of promises and transparency of communication build the foundation of a longer term customer relationship that is mutually beneficial and

a win-win for both parties. The right recruitment filters are important to ensure that the service-led organization carries the correct cultural context. In addition, experiential training helps to demonstrate and internalize the desired value-driven behaviour. Communication with external stakeholders: The industry’s perception of an organization is a reflection of the perception of its people. The leadership team in its interaction with key partners, regulators as well as competition has the opportunity to build a positive image of the company and its business philosophy. Here again the right selection of leadership is crucial as individuals are often in situations where they represent the organization and their behaviour and commitment are always under observation. Leaders who have been tempered and tested in the crucible of core values have the confidence of their shareholders to act in the best interests of the organization. At ICICI Lombard, we also encourage leadership development at various levels by allowing the person who is right for the occasion to represent us rather than rely on hierarchical choice. Corporate social responsibility: The purpose of business cannot be seen in isolation of its impact on the environment and people. Sensitivity of the leadership towards their fellow humans reflects in socially directed efforts that do not necessarily have a tangible commercial pay off. Genuine efforts which are not superficial would only come out of a deeper value-driven initiative to give something back to society. This, in turn, creates a longer term positive rub-off on the corporate image. The above perspectives bring some clarity to the interplay between values and leadership and lend credence to the belief that the efficacy of the latter is anchored in the strength of the former and draws April | 2009 NHRD Network Journal

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sustenance from it. We use values as guideposts in our decision making, in developing leadership depth, as well as in serving our internal and external stakeholders. Companies which have values that are congruent with their customers’ needs are rewarded with loyalty and advocacy leading to higher market share and a recession-proof franchise.

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It also becomes evident that individuals cannot be greater than the organization and leaders who understand this and make it a part of the organizational DNA create businesses that are sustainable over the longer term. The leadership baton then passes smoothly between successive teams who cumulatively take the organization on an unassailable leadership trajectory within its ecosystem.

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LEADERSHIP IN CHANGING TIMES JASPAL BINDRA Abstract Set in the context of the global economic meltdown, the article provides guidelines for contemporary leaders to rise above the crises and create real value. It calls for a more proactive approach on part of business leaders to look aside of the scarce resources and identity opportunities for future growth. In current circumstances, companies need leaders who can accept the challenge and position their organization to advantage by managing their internal resources optimally. About the Author Jaspal Bindra is currently the CEO Asia of the Standard Chartered Bank where he is responsible for developing strategy, driving stronger regulatory and government relations, addressing governance issues and monitoring performance. He also oversees all the M&A activities in Asia, acts as a senior contact role for major clients, regulators, governments and NGO relationships in Asia and the UK. He also chairs the Diversity & Inclusion initiative group wide. Jaspal Bindra is a member of the Visa Asia Pacific Senior Advisory Council and a Board member of Vital Voices Global Partnership. Companies and individuals are struggling to cope with the challenges presented by the global economic crisis. These are unprecedented times and leaders at all levels, and across industries, are in many cases facing the most challenging market circumstances that they have seen in their careers. Leaders not only have the responsibility of ensuring that their staff are motivated and stay engaged and productive during these uncertain times, they also have to actively manage expectations against a backdrop of scarce resources, limited rewards and bleak prospects. Managing such a situation is not easy; it calls for leadership brimming with stamina, self-confidence, maturity, and a long-term view. Those who can think ahead strategically with a vision for the future, rather than those who are inward looking and tactical, will emerge as the

winners in this equation. Companies need leaders who can see opportunity in crisis and position their organizations to advantage. They also need true people managers who can inspire and motivate their people and bring them along for the ride. The ability of a leader to retain strong talent will surely be a differentiator as companies try to transition into better times. Acknowledging the Challenge and Leading from the Front The first step in articulating strategy is to come to grips with the situation and acknowledge the challenges. Leaders at all levels in companies need to adequately and accurately take stock of the circumstances and analyze the impact of various factors on all aspects of their business. It is tempting to dismiss the current market April | 2009 NHRD Network Journal

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events as cyclical. Many take the stance that the economic problems are beyond one’s control, and will gradually right themselves of their own accord once the larger system re-balances. Successful leaders will instead read and master the situation by delving into the nuts and bolts details of their business; and they will continue to inform themselves as new information emerges. Leaders, who can roll up their sleeves and get into micro details about how their business is being affected, will be best positioned to counter impediments and gauge opportunities as the situation improves. Identifying Business Risks The ability to identify these potential business risks, both existing and emerging, is important. One of the top reasons cited for the financial crisis is inadequate risk management practices at banks, increased complexity of financial instruments and market speculation. This allowed many banks to increase their exposure disproportionately in a single line of business ignoring the underlying risks involved. Risk should be considered an input for all business decision making and not viewed as a mere regulatory activity. A dynamic risk mitigation strategy across an organization is a must. Equally, corporate governance has never been more important – financial reporting, accounting practices, disclosures and compensation structures are under immense public and governmental scrutiny. Leaders should ensure their houses are in order internally – all practices should be scrutinized, open and transparent, helping avoid allegations or misunderstandings that could lead to erosion of brand value. Understanding Customer Needs Another critical input to building a successful strategy in tough times is staying close to customers. Leaders have to stay closely informed about changing customer 62

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needs, and challenges that customers are facing in their own industries. This better positions companies to respond with relevant services. It is important to keep an on going dialogue with clients, even if transactions have currently slowed down. It will ensure that companies get the first call when the situation turns. Downturns actually provide opportunities for a company to increase value delivered, through better operational efficiency. Sygneta, a company in Latin America that manufactures fertilizers, agrochemicals and pesticides, learned from a downturn in agricultural markets a few years ago, that it can increase its value proposition to farmers (its customers) by offering them yield guarantees. This created a win-win situation for both sides - farmers were willing to buy the products for a higher price without defaulting and Sygneta started to see healthier profit margins. Sharing the Vision and Empowering People Leaders may have to make tough decisions about costs and people, but in doing so they are in fact providing their teams a chance to learn and grow. Constrained resources often bring out the best innovations and give people at all levels a chance to be thoughtful and creative. Many leaders say that they and their teams learn more in challenging times, rather than when times are good and the revenues flow in as a matter of course. It is critical therefore, that staff are brought in to share the vision and are empowered to take ownership for performance and implementation. The best laid plans often go awry because of poor implementation. Whilst leaders set direction from the top, it is important to seek input to decision making at all levels. It is usually staff on the line, those who are on the job day-to-day, that come up with the most creative ideas to successfully improve a process.

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Investing in Creative and Longlasting Solutions In trying to increase operational efficiency and encouraging staff to do more with less, companies may find that investments in infrastructure related areas like technology may reap benefits in the long run. It is important to avoid being myopic, and to take a long-term view on such investments, though it may seem a surprising time to be spending more money. This is the kind of measured risk that leaders should be courageous about taking during tough times. Historically, some of the most creative and lasting solutions have emerged in the most challenging business scenarios. ”Henry Ford cannot take credit for inventing the automobile or the assembly line. He will, however, forever be remembered as the visionary who transformed the assembly line so that his Model T could be produced more inexpensively. In doing so, he changed the automobile itself from a luxury to a necessity and changed the average man’s life for good.” Similarly, in preparing GE for the future, Jack Welch implemented his famous Six Sigma effort in 200 projects in the company in 1995 at an investment of USD 200 million. The benefits were almost immediate; GE recorded USD 170 million in savings from this initiative. Building People Capabilities No one can accomplish all of this alone. A good leader will have a dedicated team of lieutenants; capable professionals to help prepare, plan and execute. This group of lieutenants will not appear overnight – leaders should plan for succession and groom their juniors as a constant priority. In difficult times it is more important than ever for leaders to know the strengths and weaknesses of their people – to know whom they can trust to get the job done,

and make decisions in a pinch. This second bench will believe in their leader’s vision for the company and be jointly accountable for performance. This accountability is important; it provides a sense of ownership for the company and its people. Leaders should continually empower their top people in this manner and gradually build ownership. These top leaders should be careful not to let the current situation overwhelm them, or they will risk losing the confidence of their staff. Employees today are wellinformed and have access to numerous channels of information. They understand that in conditions like these, there is no silver bullet solution or one right answer. Rather than pretending to know it all or potentially making false promises to staff, honesty is the best way for leaders to be most reassuring. Leaders should demonstrate that they are on top of factors within their control and that they are prepared and capable of responding to shifting market dynamics. They should stick to the facts and be transparent – this will inspire confidence and give them integrity as a leader. Keep in mind that leaders are also competing with the media for staff attention. Now more than ever, the media limelight is focused on company leadership, exposing leaders and their internal frameworks to public analysis. People watch leaders’ reactions, the words that they use, their facial expressions, even their body language, as the basis for analysis to draw broad conclusions about a company’s health. Communicate, Communicate, Communicate In a stressful time like this, many leaders make the mistake of getting so caught up in their business strategy and balance sheet that they do not have the time to communicate with their people. They should put in a concerted effort towards April | 2009 NHRD Network Journal

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sharing information and setting realistic expectations. It is important to motivate staff by displaying a positive attitude, without appearing arrogant or overconfident. Staff should trust that their leadership are thinking ahead and planning for their collective future. Regular and timely communication is extremely important and leaders should be very visible – in town hall meetings, roundtable sessions and on the production floor. No amount of email communication can build the trust that a face-to-face meeting can. Senior leaders in a company can provide reassurance to younger staff by telling them about challenges they may have faced at some point in their own careers and their survival strategy. They can tell them stories about companies that have emerged winners through a downturn and their tactics for staying ahead of the pack. In maintaining a confident and reassuring approach, leaders will win support and trust from staff. On the other hand if they are tentative or dishonest in their communications, staff will lose faith in their leadership and in their commitment to the company as a whole. The absolute worst thing that can happen during tough times is for leaders to be seen as withholding information. If this happens, staff will start to rely on the rumour mill as their primary source of information and base their actions on what they are hearing in the corridors or in the cafeteria. This can have disastrous effects and spawn uncertainty and attrition amongst the best performing staff - simply because they believe the grapevine in the absence of direct communication with leadership. Leaders should be clear that the company and the people come above all else. They should give praise where deserved. The company’s agenda for the future, its business goals, and the role staff should play in achieving these, are items that should be reiterated consistently in all staff 64

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forums, town halls, and lunch meetings. This is the best way a leader can win the support of his people if tough decisions have to be made, whether it is cutting costs or announcing redundancies. They will understand that these steps are necessary to define the future of the company. So while leaders are coming to grips with the situation and setting strategy, it is critical that they win public and staff confidence by displaying a cool head and remaining guided by company principles to tide the organization through uncertainty. Complacency and over arrogance based on past success can be lethal. Mature leaders will expect the market to keep changing and will be prepared for the unexpected. They will be alert and have the flexibility to respond to sudden changes which may call for a quick revision of plans. This flexibility and adaptability to market dynamics is a critical differentiator for leaders today. It is very hard for anyone to predict when the downturn will reverse its trend. While it is natural for companies to think about survival during this time, the smart ones should actually be planning for the turnaround phase and how to emerge a winner. They should put together a robust strategy with contingency plans, a good people management and talent retention program and also be willing to take calculated risks to strengthen their core business, while willing to trim non-core and cost-intensive business practices. They should look at increasing their efficiencies and increasing their value proposition to their stakeholders. The landscape around us will continue to change and we may never taste the old times again. But to survive and succeed, leaders have to be resilient; they must restore confidence, prepare their organizations to adapt and respond, and build a culture of performance and accountability in their companies. Leading a company in tough

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times is not easy and it is even harder to drive performance keeping in mind that challenging times call for stretched and demanding benchmarks. It is best to therefore, always act within the value and

culture framework of the company and win the respect and trust of the people by being role models worthy of emulation. Now more than ever, leaders have to walk the talk and lead by example.

References: a.

Forbes Greatest Business Stories of All Time - Daniel Gross and the editors of Forbes magazine

b.

50 Companies that Changed the World – Howard Rothman

Other internet references: 1.

Leadership in the Era of Economic Uncertainty – Ram Charan

2.

Tackling Tough Times – John Eales – Mettle Group

3.

Winning in Turbulence – Bart Vogel – Bain and Company

4.

Managing in the Downturn – Paul Thompson – Partner, Advisory – KPMG Australia

5.

Leadership in Turbulent Times – Damien O’Brien – Egon Zehnder International

6.

The McKinsey Quarterly - Leading through Uncertainty – December 2008 – Lowell Bryan and Diana Farrell

7.

Strategy in a Structural Break – The McKinsey Quarterly – Richard P. Rumelt

8.

Seven Lessons for Leading in Crisis – The Wall Street Journal, Feb 2009 – Bill George

9.

Cracking the Code of Change – Harvard Business Review – Michael Beer and Nitin Nohria

10. Moving Upward in a Downturn – Harvard Business Review – Darrell Rigby 11. The Crisis: Mobilizing Boards for Change – The McKinsey Quarterly, Feb 2009 – Andrew Campbell and Stewart Sinclair 12. Leadership in Turbulent Times: The New Scorecard – Luis F. Valdes, Turknett Leadership Group

13. http://www.imd.ch/research/challenges/TC001-09.cfm

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THE DNA OF INDIAN BUSINESS LEADERSHIP PETER CAPELLI, HARBIR SINGH, JITENDRA V SINGH and MICHAEL USEEM Abstract A detailed study covering over 100 CEO’s and heads of human resources was conducted by the National HRD Network and the Wharton School, University of Pennsylvania to explore the areas of Leadership, Governance and Employee Management in leading Indian firms. The focus of the study was on identifying the distinctive features of Indian organizations that set them apart from their U.S counterparts. This article summarizes the key findings of the study and throws light upon the distinguishing features of India Inc. About the Authors Peter Capelli is George W. Taylor Professor of Management at The Wharton School, University of Pennsylvania. He is also the present Director of ‘Center for Human Resources’. His research interests include, human resource practices, talent and performance management and public policy related to employment among others. Harbir Singh is the The Mack Professor of Management at The Wharton School, University of Pennsylvania. He is also the Vice Dean for Global Initiatives and the Co-Director of Mack Center for Technological Innovation. His research interests include strategies for corporate acquisitions, corporate governance, joint ventures, management buyouts and corporate restructuring. Jitendra V Singh is the Saul P. Steinberg Professor of Management at The Wharton School, University of Pennsylvania. He is also the Vice Dean for International Academic Affairs. He holds a PhD from Stanford University. His research interests include, business process outsourcing, developing firm capabilities, organizational evolution and organizational change, among others. Michael Useem is the William and Jacalyn Egan Professor of Management at The Wharton School, University of Pennsylvania. He is also the Director of Center for Leadership and Change Management. He holds a PhD from Harvard University. His research interests include, leadership, decision making, governance, corporate change and restructuring among others.

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On August 15, 2007, India celebrated the 60th year of its independence from the British. Both within and outside of India, the interest in how India has been doing focuses on the Indian economy and Indian companies in particular. The reason, of course, is because the economy has been booming and is increasingly becoming a model for countries elsewhere. GDP growth until the recent global meltdown averaged an amazing 9 - 9.5 percent per year; foreign investment, both portfolio investment and FDI, were at an all time record high; India’s foreign exchange reserves, which in 1991 were down to just over $1 billion, were until recently at $320 billion; inflation was well under control, and a large swathe of Indian society has been lifted out of poverty. Clearly, India’s economic success scores for special interest, yet another reason that draws world attention is the ability of Indian companies to deal with a workforce of incredible diversity. At present, India recognizes more than 18 languages, is divided among six major ethnic groups and scores of smaller ones. Getting this extraordinarily diverse population to work together is a challenge that dwarfs the problems we see in the U.S. and most other countries in the world. The Indian economy and especially the large corporations that drive this diverse workforce, therefore, seem to represent something unusual that deserves great consideration. Moreover, these are companies that came right out of economic liberalization (many getting started only after the 1991 economic reforms) and immediately became competitive with the best companies in the West. This level of success raises some profound questions that are important not just in India but in the rest of the world as well. The most important of these questions is simply, what is it that Indian businesses are doing? Is there something distinctive about the

way in which they are operating that might account for this success? In particular, are they functioning differently than the dominant models we see for managing large enterprises in the West, and, if so, could those differences help us understand the success of these companies? These are obviously difficult questions and attempting to assess all of them would be almost an impossible task. Therefore, we decided to focus on the aspects that have the biggest effect on the enterprise as a whole. The most important of these aspects are associated with the CEOs and the ways in which they operate. Undoubtedly, the priorities of the CEOs and their decisionmaking processes have an enormous influence on their enterprises. Therefore, the focus of the research was CEO’s priorities as studying those reveal the most distinctive and most important aspects of operating Indian businesses. The goal of the study was to identify the distinctiveness of the Indian model especially from the U.S. As focus of the study, the areas of leadership, corporate governance, and management of employees was chosen. Regarding leadership, expectation was that there would be a great deal of heterogeneity among different types of Indian firms – more Western style firms like Hindustan Unilever or ABB, or public sector firms like ONGC or Hindustan Petroleum, or promoter-led companies like the Aditya Birla Group, Tata Group or the RPG Group, or firms like Infosys or Larsen & Toubro. In the corporate governance domain, we were aware that this has become a topic of great interest to Indian firms. Once Clause 49- the Indian version of the Sarbanes Oxley Act, came into effect at the end of 2005, the regulatory context for corporate governance changed significantly. The human resources area had traditionally been a quiet backwater on the Indian management landscape, governed by extensive regulations and April | 2009 NHRD Network Journal

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union management relations. In recent years, however, competition for human talent has increased dramatically. Rates of voluntary turnover and retention challenges have exploded. Also, compensation packages have grown sharply in a literal war for talent. For many companies attracting and retaining the best talent has become the top strategic priority and a shortage of trained and educated workers may now be the most significant constraint on the overall economy. As part of the study we interviewed over 100 chief executives, managing directors, and other top executives of large, publicly traded Indian companies. We were especially interested in learning whether there were distinctive aspects to the way these leaders operated their organizations. We also surveyed their heads of human resources to identify additional details about the operation of their companies and used those findings to draw comparisons with similar operations in the U.S. The interviews with the senior executives reflected several leadership themes in the Indian context. All the top executives interviewed were asked “What are the top two leadership capacities that have been most critical for the exercise of your leadership during the past five years?” Although there was considerable diversity in the responses, three primary themes emerged from the interviews with the executives: Vision and strategy, the ability to shape the structure or architecture of the organization and personal qualities. Clearly, enterprise values and vision were deemed by the Indian business executives as the sine qua non of their enterprise, the starting platform upon which they constructed all else. Their values and vision, along with strategic thinking about the company’s future, defined mindset, influenced decisions, and guided execution. By self-consciously placing their 68

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values and vision for the company at the top of their operating framework, the business leaders created guideposts that helped carry them through both hardship and prosperity. The second set of responses focused on the structure of the organization and of the executive teams that run it. Many executives emphasized the importance of building their top team, as the most common response. The qualities of their direct reports were similar to what they expected of themselves, including an ability to think strategically, a commitment to the values of the firm, and a capacity to grow and adapt as the companies expanded. Importantly, the CEOs did not focus attention on their own individual or personal qualities as being the key competencies for leadership. To get at this issue more explicitly, an additional question was asked, “In your experience, how are Indian business leaders different from those from other countries, especially the U.S.?” The interviews reveal three major themes in the way Indian executives perceive themselves and their peers as advantaged, relative to their counterparts in the U.S. and Europe; Flexibility and resilience, family ownership, and entrepreneurship and risk taking. One of the common themes that emerged across the interviews was the belief that Indian business leaders have learned through hard experience to look beyond the endless obstacles. India had been through the ‘license raj’ and liberalization, therefore it was essential for business leaders to constantly reinvent, and be flexible and resilient in the face of an uncertain environment. Besides flexibility, family ownership was cited as the second most common difference by the respondents. Unlike in the U.S, family stakes remain more important in many companies, and this is seen by many executives as an asset. Several of the CEOs believe that Indian business leaders place greater emphasis on their families where

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family involvement is significant as in succession planning, which is often an intra-family affair. The extent of entrepreneurial behavior was the third theme in the differences seen by the Indian executives. Many of the Indian executives stressed their willingness to take risks in building their companies. This entailed going into uncharted waters, testing unproven business models, and acting as entrepreneurs even if running a large firm. The second focus area of the study was the domain of Corporate Governance. India has undergone substantial changes in corporate governance over the past decade. With much greater amounts of FII money flowing into Indian stocks, there had been an increasing demand for transparency and disclosure from Indian firms. In 2005, clause 49 was introduced as guidelines for corporate governance in India. In the study, the vast majority believed that Indian practices would converge with those used elsewhere, especially in the US, to the extent that they saw Indian practices as being distinctive, their main explanation was the greater importance of promoter control and even family ownership amongst Indian companies. They saw the role of independent directors as important for good governance and believed that these directors had an especially important role to play in the strategy formation process. The CEOs valued professional experience, good reputation, and independent thinking as key attributes for such directors. Yet, an important group of respondents felt that Indian firms will develop a model of governance unique to Indian conditions, including greater concern for the interests of stakeholders, such as employees and even the larger society, beyond the traditional focus on the shareholder. Lastly, in the area of managing employees Indian companies differed significantly from their US counterparts. The study

revealed that Indian companies design and execute extensive diversity programs as a way to reach a broader labor market. They also have more sophisticated systems of workforce planning and of performance management than one typically sees in the U.S. Where U.S. companies focus their attention in human resources on cost reduction, Indian companies see their employees more as capital investments that have to be supported and nurtured. As a result, these companies manage their employees much more carefully than do their U.S. counterparts. The Indian executives, viewed employees much more as assets whose contributions should be maximized, rather than as financial liabilities, a drain on resources. The picture of Leadership and executive priorities drawn from the study suggest that there are important elements of distinctiveness in the Indian context. The Indian CEO’s greater focus on managing the inside of their businesses and the attention that they give to employee related issues appear to be quite distinctive. In these areas, the Indian CEOs appear to be following the ‘best practice’ recommendations from around the world, albeit recommendations that their CEO counterparts especially in the U.S do not follow. The relatively lower priority the Indian CEOs appear to give to financial issues, including addressing the investor community, is also distinctive compared to the Anglo-US Models. Whether that priority will increase with the expansion of U.S-style investors is an open question. While governance appears to be converging with the U.S model, CEO priorities and practices appear to be quite distinctive in ways that may not converge. The greater involvement that Indian CEOs appear to have in the strategy formation process may at some point change as their organizations become more professionalized, although the April | 2009 NHRD Network Journal

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entrepreneurial inclinations of the Indian CEOs may keep them involved in that process even when professional managers are more common. The factors that account for the distinctiveness of these Indian practices whether they are based on cultural differences, the different state of development of the Indian economy, or whether Indian CEOs have somehow been able to sustain practices that work better remains to be examined. Implications for HR The perspectives shared by the CEOs help us understand how they have succeeded in the past and what might be necessary to do so in the future. They also suggest which aspects of leadership; governance and human resource management are at the top of the CEO’s agenda. Keeping this as the background, HR professionals need to achieve common themes in these agendas. In the end, we leave leaders to consider the following challenges. Leadership To build a strong leadership capacity requires both, being visionary and tactical ability to construct the architecture of the organization. How can HR integrate these competencies into its leadership pipeline? CEOs emphasize the importance of building their top team. What can HR do to build this priority into the organizational and leadership philosophy of the enterprise? “A critical leadership capacity means empowering talent to aggressively grow the company,” as one CEO put it. How can HR incorporate this level of empowerment into the organizational architecture? Entrepreneurship The Indian context has encouraged an entrepreneurial spirit, coupled with flexibility, resilience and several other 70

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factors, all of which contribute towards success in India. How should HR deal with this innate ability in its employee? While features such as family ownership, a directive & hierarchical mindset and emotion & intuition have been a part of the Indian way of working, what is the HR professional’s analysis of its relevance in the future? What could be those elements of these features that can enable organization’s growth in the global arena, and what are those elements that hinder the process? How can HR frame its systems, policies and practices to encourage innovation, such that the CEO’s expectations of ‘changing the status quo’ and breaking the complacency mode’ are fulfilled? Fostering Workplace Diversity As India continues to go global, workforce diversity is not just about managing differences, but about encouraging diverse backgrounds and cultures. CEO’s are spending less time on fostering workplace diversity. HR’s responsibility here is two fold, to a) spearhead diversity in the organization at a strategic level and b) translate the impact of the workplace diversity to the bottom line. Governance With the greater amounts of FII money flowing into Indian stocks, there has been as increasing demand for transparency and disclosure from Indian firms. Once clause 49 came into affect in 2005, the regulatory context for corporate governance changed significantly. In this scenario, are HR professionals proficient in the principles, philosophy and translation of governance policies and practices in the organization? What is HR’s role in the area of governance?

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Governance practices in India focus on a larger spectrum of stakeholders, such as the employees and local communities. In some cases, it is seen from the perspective of national development. Keeping in mind the intersection of national and organizational interests in the way governance may be defined in India, what are the competencies the HR community needs to build for itself, to strengthen the process? CEO’s expectations of HR CEOs believe their number one priority is to shape the culture, with able support and expert guidance from HR. It is essential for HR leaders to develop ways and means to measure culture change and indoctrination. How can the HR professional build his /her role as Strategy Architect and Operational Executor to build and ingrain culture into the organization?

Managing/Developing talent is globally seen as the CEO’s most critical challenge today. In India, this priority is further impacted by the widespread concern about the quality of candidates in the job market. As a commodity, what are some of the interventions that HR can initiate now to balance the talent supply-demand ratio of the Indian market? Legacies & Successors Indian leaders firmly believe that leaving a legacy means inspiring and instilling change, at an employee level, an organizational level, or at a national level. India’s century needs this kind of thinking and execution. HR as the link between people and business is at the forefront of shaping this common vision across corporate India. How can the HR community drive this vision of change?

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THE 10 GREATEST CEOs OF ALL TIME JIM COLLINS Abstract In the backdrop of economic crises and failed governance mechanisms, the article lists down characteristics of 10 greatest CEOs of all time who looked beyond short term gains to create long term sustainable value. The author posits that, great CEOs are not the ones who see themselves as members of an elite group but are the ones who feel a deep sense of connectedness with their organization and who build values that thrive long after they have left the organization. About the Author Jim Collins is a student and teacher of enduring great companies – how they grow, how they attain superior performance, and how good companies can become great companies. Having invested over a decade of research into the topic, Jim has authored or co-authored four books, including the classic BUILT TO LAST, a fixture on the Business Week best seller list for more than six years, and has been translated into 29 languages. His work has been featured in Fortune, The Wall Street Journal, Business Week, Harvard Business Review, and Fast Company. Driven by a relentless curiosity, Jim began his research and teaching career on the faculty at Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992. In 1995, he founded a management laboratory in Boulder, Colorado, where he now conducts research and teaches executives from the corporate and social sectors. It’s a familiar scene. An industry under fire. A congressional committee demanding answers. A corporate CEO called to testify. Yet the familiarities, in this case, end there. When Boeing CEO Bill Allen appeared before a House subcommittee—addressing charges that military aircraft makers had improperly inflated profits at the government’s expense—there was no lawyer whispering in his ear. There were no notes before him. There was no hint that he wasn’t personally responsible for Boeing’s actions. And when he had finished his quietly forthright explanation, there was no question that Boeing—far from gouging the government to pad executives’ bonuses—had in fact been 72

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laying the foundations for future greatness, plowing profits into research and development. The committee’s response now seems unimaginable: It erupted into a standing ovation. That image, from 1956, kept popping to mind whenever someone asked me about the business meltdowns of 2001 and 2002. What, went the questions, should be done about governance? What should Congress do? What should boards do? What, what, what? I usually declined to comment, feeling I had little to say that had not already been said. But as the Allen image lingered, I came to realize that I did have something to say.

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It’s just that my answer wasn’t a what answer. It was who. When the debates over governance mechanisms and procedural reform are all said and done, one question will still tower above all others: Who should we choose to run our corporations? In the 1990s, it’s now clear, boards increasingly gave the car keys to the wrong people. Like doctors bleeding patients to death in the 1600s, the boards weren’t trying to do harm. They were simply using the wrong models. Yet where, these days, are the right models? For good reason, we’ve become cynical about CEOs. There seem to be no heroes left standing, no one to emulate or believe in. There’s an increasingly gloomy sense that we should simply throw up our hands and give up on corporate leadership. I disagree. Having spent years studying what separates great companies from mediocre ones, I can say unequivocally: There are role models to learn from—albeit not the ones you might expect. It’s what inspired me to go back to my research and assemble my list of the ten greatest CEOs of all time. Who made the cut? Some names on the list will be familiar, while several you might expect to see—names like Gates, Grove, Welch, and Gerstner—weren’t eligible for a simple reason: Great CEOs build organizations that thrive long after they’re gone, making it impossible to judge their performance until they’ve been out of office at least ten years. That criterion—legacy— was one of four I used to winnow a universe of more than 400 CEOs. I also scored the top candidates on impact (presiding over innovations—whether technical or managerial—that changed things outside the company’s walls), resilience (leading the company through a major transformation or crisis), and financial performance, measured by cumulative stock returns relative to the

market (or other financial metrics in the case of pre-IPO companies) during the CEO’s tenure. So what, exactly, made these ten so great? Strikingly, many of them never thought of themselves as CEO material. The secondgreatest CEO on the list initially refused the job on the grounds that he wasn’t qualified. No. 9 described herself as “scared stiff.” No. 5 was once told flatly, “You will never be a leader.” Striking, too, is the sheer scale of their time frames. Surrounded by pressures to manage for the quarter, they managed for the quarter-century—or even three-quarters of a century. The No. 4 CEO shaped a company that would average 15% earnings growth for an astonishing 75 years. Yet if one thing defines these ten giants, it was their deep sense of connectedness to the organizations they ran. Unlike CEOs who see themselves principally as members of an executive elite—an increasingly mobile club whose members measure their pay and privileges against other CEOs’—this group’s ethos was a true corporate ethos, in the original, nonbusiness sense of the word corporate: “united or combined into one.” They understood the central paradox of exceptional corporate leadership: On the one hand, a company depends more on the CEO than on any other individual. Only the CEO can make the really big decisions. Yet a company equally depends on the CEO’s understanding that his or her role still represents less than 10% of the total puzzle. Much depended on them, but it was never about them. Inclusion on this list would surprise, if not horrify, more than a few of them. But if the question is how to identify more of the right leaders—and how a new generation can learn to become the right leaders— there is no better answer than these ten. In an age of diminished standards, those they set loom larger than ever. April | 2009 NHRD Network Journal

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No. 10: David Packard Rejected the CEO club His eulogy pamphlet identified the HewlettPackard co-founder as ‘Rancher, etc.’ In 1949, 37-year-old David Packard attended a meeting of business leaders. Fidgeting while they discussed how to squeeze more profit from their companies, he was finally unable to contain himself. “A company has a greater responsibility than making money for its stockholders,” he asserted. Eyes turned toward his six-foot-five-inch frame. “We have a responsibility to our employees to recognize their dignity as human beings,” Packard said, extolling his belief that those who help create wealth have a moral right to share in that wealth. To his elders, Packard’s ideas seemed borderline socialist if not outright dangerous. “I was surprised and shocked that not a single person at that meeting agreed with me,” Packard reflected later. “It was quite evident they firmly believed I was not one of them, and obviously not qualified to run an important enterprise.” That was just fine with David Packard. He never wanted to be part of the CEO club; he belonged to the Hewlett-Packard club. In an era when bosses dwelt in mahoganypaneled sanctums, Packard took an opendoor workspace among his engineers. He practiced what would become famous as “management by walking around.” Most radical of all for the time, he shared equity and profits with all employees. What set Packard apart, in other words, is that he wasn’t a person set apart. His idea of a good time, according to a co-worker, was to get together with friends and string barbed wire. Despite being one of Silicon Valley’s first self-made billionaires, he continued to live in the small, understated house he and his wife had built in 1957. And though he donated (with Hewlett) to 74

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Stanford University an amount comparable to the present value of Jane and Leland Stanford’s original endowment, he never allowed his name to appear on any of its buildings while he was alive. By defining himself as an HP man first and a CEO second, Packard did more than demonstrate humility. He built a uniquely dedicated culture that became a fierce competitive weapon, delivering 40 consecutive years of profitable growth. While Packard’s values have since waned within HP, he did more to create the DNA of Silicon Valley than perhaps any other CEO. Like the heritage left by the architects of democracy in ancient Athens, the spirit of his and Hewlett’s system lives on, far beyond the walls of the institution they built. No. 9: Katharine Graham Wasn’t afraid of fear The Nixon White House threatened her, but the chief of the Washington Post Co. didn’t flinch. On Aug. 3, 1963, Katharine Graham heard the crack of a gunshot within her house. She ran downstairs to discover that her husband, Philip, lay dead by his own hand. On top of the shock and grief, Graham faced another burden. Her father had put the Washington Post Co. in her husband’s hands with the idea that he’d pass it along to their children. What would become of it now? Graham laid the issue to rest immediately: The company would not be sold, she informed the board. She would assume stewardship. “Steward,” however, would not describe Graham’s approach to her new role. At the time, the Washington Post was an undistinguished regional paper; Graham aimed for people to speak of it in the same breath as the New York Times. A crucial decision point came in 1971 when she confronted what to do with the Pentagon

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Papers—a leaked Defense Department study that revealed government deceptions about the Vietnam war. The Times had already incurred a court injunction for publishing excerpts. If the Post published, it risked prosecution under the Espionage Act. That, in turn, could jeopardize the company’s pending public stock offering and lucrative television licenses. “I would be risking the whole company on this decision,” Graham wrote in her memoir, Personal History. Yet to opt for assured survival at the cost of the company’s soul, she concluded, would be worse than not surviving. The Post published. Eventually vindicated by the Supreme Court, it was a remarkable decision for an accidental CEO who suffered from lifelong feelings of insecurity; phrases like “I was terrified” and “I was quaking in my boots” pepper her memoir. That anxiety would soon reach a crescendo as Post reporters Bob Woodward and Carl Bernstein doggedly investigated what became known as Watergate. Today we take that story’s outcome for granted. But at the time, the Post was largely alone in pursuing it. In choosing to publish, Graham built a great paper and, in turn, a great company— one that ranks among the 50 bestperforming IPOs of the past quartercentury and earned the investment of Warren Buffett. Graham never awarded herself much credit, insisting that, with Watergate, “I never felt there was much choice.” But of course, she did choose. Courage, it’s said, is not the absence of fear, but the ability to act in its presence. By that definition, Katharine Graham may be the most courageous CEO on this list. No 8: William McKnight Disciplined creativity He gave fledgling ideas freedom to grow at 3M—but insisted they learn to stand on their own.

The early giants of industry tend to fall into one of two camps: Individual innovators (think Walt Disney) and system builders (think John D. Rockefeller). 3M’s William McKnight falls into neither. Beginning in 1929, the bookish accountant fused the two models into something entirely new: a company that turned innovation into a systematic, repeatable process. While you couldn’t predict exactly what McKnight’s system would create, you could predict with certainty that it would create. Many know the story of the 3M scientist who blasted a hole in his basement to house the machine that made his little sticky tabs—a product that had failed market tests—and how, like a drug dealer, he created a base of addicted users by distributing free samples to headquarters staff. It’s one of many 3M stories that celebrate the lone spirit who persists against all odds. The oft-overlooked lesson, though, is the “all odds” part. It’s precisely because 3M entrepreneurs must battle attempts to kill off their ideas that a handful of winners like Post-its emerge. Without this creative tension—freedom vs. discipline, innovation vs. control—all you have is chaos, or worse. Enron was a highly innovative culture that lacked discipline, innovating itself right out of existence. “The test of a first-rate intelligence,” wrote F. Scott Fitzgerald, “is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function.” By that definition, McKnight was not just a first-rate intelligence, but a genius—a genius whose company was lucky by design. No. 7: David Maxwell Turned a turnaround into art Fannie Mae was losing $1 million a day when he arrived—’an opportunity to make [it] into a great company.’ In 1981, as the stock of Chrysler hit an alltime low, America was beginning its April | 2009 NHRD Network Journal

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enthrallment with the man hired to save it. Lee Iacocca would soon be a national icon—bestselling author, star of more than 80 commercials, and everyone’s image of a turnaround artist. That same year, as the stock of Fannie Mae hit an all-time low, a different executive was hired to save the deeply troubled mortgage lender. David Maxwell would not become a national icon—nor even a recognizable name. Yet by the time both men retired in the early 1990s, Maxwell’s Fannie Mae had beat the stock market at a rate more than twice that attained by Chrysler under Iacocca. More inspired than inspiring, more diligent than dazzling, Maxwell took a burning house and not only saved it but built it into a cathedral. Some steps, such as selling off $10 billion in unprofitable mortgages, were classic fireman stuff. But his deepest genius was to frame the rebuilding around a mission: strengthening America’s social fabric by democratizing home ownership. If Fannie Mae did its job well, people traditionally excluded from owning homes—minorities, immigrants, singleparent families—could more easily claim their part of the American dream. If turnaround is an art, Maxwell was its Michelangelo. No. 6: James Burke Acted before crisis hit

Ask people to single out a courageous CEO action, and many will cite James Burke’s decision to pull Tylenol capsules off the shelves in response to the cyanidepoisoning crisis of 1982, taking a $100 million hit to earnings along the way. It’s a wonderful story. But it misses the point. Burke’s real defining moment occurred three years before, when he pulled 20 key

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“I said, ‘Here’s the credo. If we’re not going to live by it, let’s tear it off the wall,’ “ Burke later told Joseph Badaracco and Richard Ellsworth for their book Leadership and the Quest for Integrity. “We either ought to commit to it or get rid of it.” The team sat there a bit stunned, wondering if Burke was serious. He was, and the room erupted into a debate that ended with a recommitment. Burke and his colleagues would conduct similar meetings around the world, restoring the credo as a living document. No one could have predicted the act of terrorism perpetrated on J&J customers in 1982. But J&J’s response was predictable. It didn’t need to debate whether customer safety outweighed short-term financial concerns, because the debating was already done. Burke makes the list not because he led J&J through crisis; he makes it because he led in the absence of it. No. 5: Darwin Smith

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executives into a room and thumped his finger on a copy of the J&J credo. Penned 36 years earlier by R.W. Johnson Jr., it laid out the “We hold these truths to be selfevident” of the Johnson & Johnson Co., among them a higher duty to “mothers and all others who use our products.” Burke worried that executives had come to view the credo as an artifact—interesting, but hardly relevant to the day-to-day challenges of American capitalism.

Asked questions and moved rocks The Kimberly-Clark chief was told ‘You’ll never be a leader’ by the Army’s officer-training school. Lois Smith could tell a big decision was afoot at Kimberly-Clark whenever she heard the rumbling of a backhoe in the middle of the night. That was Darwin again, moving rocks from one pile to another. This was how her husband mulled over big decisions—and to judge by the

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huge piles still standing sentinel at Gotrocks Farm in Wisconsin, Smith was a champion muller. When he became CEO of Kimberly-Clark in 1971, Smith faced a brutal fact: The company languished in mediocrity, the bulk of its capital tied up in giant paper mills. Yet Smith offered no vision statement, no splashy acquisition, no hoopla-laden change program. Instead he posed questions. What, he pressed his colleagues, could Kimberly-Clark be passionate about? What could it be best at in the world? What could improve its economics? For months he continued to ask questions and move rocks. This was not Smith being indecisive. Diagnosed with nose and throat cancer shortly after becoming CEO, he told Lois what he’d learned from his illness. “If you have a cancer in your arm, you’ve got to have the guts to cut off your arm.” He paused. “I’ve made a decision,” he continued. “We’re going to sell the mills.” The decision had grown out of one of Smith’s dialogues in which a fellow executive noted that Kleenex, a sideline product, had become a brand synonymous with its category, like Coke or Band-Aid. In what a Kimberly-Clark director called the “gutsiest decision I’ve ever seen a CEO make,” Smith jettisoned 100 years of corporate history, right down to the original mill in Kimberly, Wis. Analysts derided the loss of revenue. The stock took a hit. Forbes predicted disaster. But Smith’s ruminations had equipped him with quiet steel. A CEO must be willing to act boldly, yet boldness is worthless if you’re wrong. It’s an obvious point, but one routinely ignored by those caught up in the fanfare of big action. Smith grasped that it is better to be right than to be impressive. And Smith got it right. Twenty-five years after becoming CEO, Kimberly-Clark was

the world’s No. 1 paper-based consumerproducts company—its stock outperforming the market by a factor of four over that span—and owned its main rival, Scott Paper, outright. Smith moved rocks and, in the end, moved a rock that nobody thought could be moved. No. 4: George Merck Put profit second The Merck & Co. boss didn’t worry about Wall Street—and grew profits 50-fold. Late one afternoon in 1978, Dr. William Campbell did what all great researchers do: He wondered at the data. While testing a new compound to battle parasites in animals, he was struck with the idea that it might be effective against another parasite—one that causes blindness and itching in humans so horrific that some victims have committed suicide. Campbell might have simply scribbled a note in the files and gone to lunch. After all, the potential “customers”—tribal people in remote tropical locations—would have no money to buy it. Undaunted, Campbell penned a memo to his employer, Merck & Co., urging pursuit of the idea. Today 30 million people a year receive Mectizan, the drug inspired by his observation, largely free of charge. The most exceptional part of the story is that it wasn’t an exception. “Medicine is for people, not for the profits,” George Merck II declared on the cover of Time in August 1952—a rule his company observed in dispensing streptomycin to Japanese children following World War II. Yet fuzzy-headed moralistic fervor wasn’t George Merck. Austere and patrician, he simply believed that the purpose of a corporation is to do something useful, and to do it very well. “And if we have remembered that, the profits have never failed to appear,” he explained. “The better we remembered, the larger they have April | 2009 NHRD Network Journal

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been.” It’s the mirror image of CEOs whose unhealthy fixations with Wall Street have served neither people nor profits: Merck served shareholders so well precisely because he served others first. No. 3: Sam Walton Overcame his charisma ‘I have the personality of a promoter,’ the WalMart founder wrote, but ‘the soul of an operator.’ A Brazilian businessman once told me how he’d sent letters to the heads of ten U.S. retailers in the1980s, asking to visit to see how they ran a retail operation. Most didn’t bother to reply, and those who did sent a polite “No, thank you.” All except Sam Walton. When the Brazilian and his colleagues stepped off the plane in Bentonville, Ark., a white-haired man asked if he could help. “We’re looking for Sam Walton,” they said, to which the man replied, “That’s me.” Walton led them to his truck and introduced his dog, Roy. As they rumbled around in the front cab of Walton’s pickup, the Brazilian billionaires were pummeled with questions. Eventually it dawned on them: Walton had invited them to Bentonville so that he could learn about South America. Later Walton visited his friends in Sao Paulo. Late one afternoon there was a phone call from the police. Walton had been crawling around in stores on his hands and knees measuring aisle widths and had been arrested. The story encapsulates some of Walton’s greatest strengths, notably his hunger for learning. But it also points to his biggest liability: his singularly charismatic personality. Companies built around a cult of personality seldom last. After Sam, would Wal-Mart decline like a church that loses its inspirational pastor? Yet Walton himself refused to let his colorful personality distract from his 78

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central message: to make better things ever more affordable to people of lesser means. And before his death in 1992, he made two brilliant moves to ensure that idea would outlast him. First, he set a goal that he knew would be unachievable in his lifetime: to grow annual sales from less than $30 billion to $125 billion by the year 2000. Second, so that no personality would become bigger than the idea, he picked a successor who had seemingly undergone a charisma bypass. Under David Glass, Wal-Mart blew right past the $125 billion goal, clocking in at $165 billion in 2000. Walton knew better than anyone the dangers of charismatic leadership. He proved that, like any other handicap, it can be overcome. No. 2: Bill Allen Thought bigger ‘Don’t talk too much,’ Boeing’s new chief admonished himself. ‘Let others talk.’ Its planes helped win the war—yet victory in 1945 looked like death for Boeing. Revenues plummeted more than 90% as orders for bombers vanished overnight. And bombers, everyone knew, were what Boeing was all about. Everyone, that is, but its new leader. An understated lawyer who said he wasn’t qualified for the job, Bill Allen never saw Boeing as the bomber company. It was the company whose engineers built amazing flying machines. In 1952 he bet heavily on a new commercial jet, the 707. At the time, Boeing had no business being in the commercial market, or at least that’s what potential customers said. (“You make great bombers up there in Seattle. Why don’t you stick with that?”) Yet Allen’s time frames were bigger too. He saw that Boeing could compete by changing the industry. Under his leadership, Boeing built the 707, 727, 737, and 747—four of the most successful bets in industrial history. At a board

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meeting described by Robert Serling in Legend & Legacy, a director said that if the 747 was too big for the market to swallow, Boeing could back out. “Back out?”, stiffened Allen. “If the Boeing Aircraft Co. says we will build this airplane, we will build it even if it takes the resources of the entire company.” Like today’s CEOs, he endured the swarming gnats who think small: short time frames, pennies per share, a narrow purpose. Allen thought bigger— and left a legacy to match. No. 1: Charles Coffin Built the stage on which they all played General Electric’s first president didn’t see himself as a genius; he came from the shoe business. Most people have never heard of Charles Coffin—and that’s the ultimate testimony to his greatness. His predecessor had something to do with this. No CEO finds it easy to take over from a founding entrepreneur; now imagine that founder holds patents on the electric light, the phonograph, the motion picture, the alkaline battery, and the dissemination of electricity. But Coffin knew his job was not to be the next Thomas Edison—though Coffin, too, would prove a master inventor. His invention was the General Electric Co. Coffin oversaw two social innovations of huge significance: America’s first research laboratory and the idea of systematic management development. While Edison

was essentially a genius with a thousand helpers, Coffin created a system of genius that did not depend on him. Like the founders of the U.S., he created the ideology and mechanisms that made his institution one of the world’s most enduring and widely emulated. Edison’s wouldn’t be the only name to overshadow his. Coffin’s era (1892-1912) became known as the “Steinmetz era,” in homage to the brilliant GE electrical engineer Charles P. Steinmetz. What little name recognition Coffin did enjoy would then be obliterated by the likes of Swope, Cordiner, Jones, and Welch—GE CEOs who became giants in their own day. Jack Welch’s stature, in particular, reached a point where GE was called the House That Jack Built. In fact, Welch was as much a product of GE as vice-versa. Certainly Welch vastly improved the system, and history will likely judge him a great executive. He was a master at developing general managers and steadily increasing profit per unit of executive talent. But Welch did not invent this concept; he inherited it. The same cannot be said of Charles Coffin. More than any other leader, Coffin made GE into a great company, creating the machine that created a succession of giants. For that reason, he stands a notch above the CEOs whose names eclipsed his. He built the stage on which they all played.

“Copyright © 2003 by Jim Collins. Jim Collins operates a management-research laboratory in Boulder, Colorado. He is the author of Good to Great: Why Some Companies Make the Leap… And Others Don’t and co-author of Built to Last: Successful Habits of Visionary Companies. More information about Jim Collins and his work can be found at www.jimcollins.com.” April | 2009 NHRD Network Journal

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I10 : FRAMEWORK FOR LEADERSHIP B. SANTHANAM Abstract Leadership behavior is one of the most researched and talked about phenomenon of the modern business environment. Drawn from success stories of real life, this article defines key traits of leadership with contemporary illustrative examples. These traits, if inculcated by present leaders will lead to increased leadership effectiveness which forms the bedrock for success in an organization. About the Author Santhanam obtained his B.Tech from Indian Institute of Technology, Madras and Post Graduation in Management from Indian Institute of Management, Ahmedabad, with focus on Operations, Systems and General Management. Santhanam, as the President – Flat Glass, South Asia and founder Managing Director of Saint-Gobain Glass India, enabled the company to achieve, in a short time, quality, technical and market leadership position. Santhanam is a Member of the National Council since 2006 and Southern Regional Council of Confederation of Indian Industry (CII). Santhanam is also the Chairman of the “CII’s National Committee on Skills, Human Resources and Industrial Relations” and Chairman, “Task Force on Human Resources, Skills, Employability, Affirmative Action and ITI- IMC” of CII Southern Region.

The framework I propose constitutes ten interrelated traits that I believe significantly contribute to effective leadership. My experiential learning over the years leads me to believe that these 10i’s may be the defining dimensions of Leadership, which if inculcated will provide potential leaders a framework for demonstrating leadership characteristics that form the bedrock of any organization’s success. i1 - Intelligence First and foremost differentiator of the leader from other persons is Intelligence. The early 1900’s saw the emergence of trait theories of leadership. These theories took the view that there are a set of traits that create a distinction of leaders from nonleaders. Studies around the trait theories 80

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i nformation i ntelligence

i ntegrity i ndependence

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i ntens ity i ns piration

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included intelligence as a key characteristic of leadership. More often, the society analyses people on Analytical intelligence but real leadership demands more than just that. Analytical intelligence is a prerequisite for an effective leader. Most of the current research point

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fast becoming a true source of competitive advantage for effective leadership. Information

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out to the need for a threshold level of analytical ability to understand the social, scientific, human phenomena in order to make meaningful connections and conclusions. But other forms of Intelligence, viz., Emotional and Social Intelligence are even more crucial for a successful Leader. An emotionally intelligent leader is aware of herself and empathizes with others. A socially intelligent leader leverages networking with others, collaborates, persuades and influences people over whom he has limited authority. Leadership demands ability to select the right approach, bring alignment and achieve desired goals through superior execution by constantly leveraging the leaders’ Analytical, Emotional and Social intelligence. Rarely you will find a top leader excel in only one form of intelligence. Eminent leaders have always developed a holistic intelligence that combines all the three dimensions. We can find no better person than Barrack Obama, who perhaps excels in all dimensions. Obama displays deep understanding of social, economic, political issues and has the uncanny ability to align and collaborate with other world leaders for larger cause. i2 – Information ‘Information is power’ is an old adage, but one that holds true in leadership situations. Information is easily accessible in today’s era. However, the ability to generate knowledge, develop frameworks and draw linkages through the use of information is

An example of the power of information is evident through the example of Google. It had a humble beginning that took root in a Stanford University dorm room and quickly spread to information seekers around the globe. Larry Page and Sergey Brin chose to develop a search engine that would organize information on the web and the power of information has guided Google to a leadership position. Truly, it lives by its vision - ‘to organize the world’s information and make it universally accessible and useful.’ Another example of the power of information is Wikipedia, which is a multilingual, web-based, free-content encyclopedia. Wikipedia has become one of the most visited sites and is instrumental in knowledge transfer across the world. Excellent leaders always seek high quality information, possess domain expertise and knowledge in key areas and constantly keep themselves updated. Their keen Analytical ability helps them to connect and convert the data into information and knowledge. They possess ability to provide relevant information at the right time and at the right place. i3 – Insight In today’s era of information accessibility to everyone, the differentiating factor of effective leadership is the ability to create insights from data and information. Insight, when capitalized upon, leads to innovation and further contributes to the organization’s competitive advantage and leadership position. Understanding April | 2009 NHRD Network Journal

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consumer psychology by studying the market, customer behavior and industry trends are useful sources of generating insight. There are many companies which bank upon these insights to develop innovations in products, business processes, distribution channels, value chains, people management and even in the functions of management.

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An example of one such company is CavinKare which launched its key product, “Chik Shampoo” in innovative sachet packing at a strategic price of Re.1 and 50p. After 3 decades, that insight has now become a main stream idea. In a highly competitive FMCG category that seemed impenetrable to most marketers, Chik Shampoo identified a humongous opportunity in rural and semi urban India and created waves with its entry into these markets. During the early 70’s long before it was fashionable to talk about Information Technology and Outsourcing, F C Kohli, the doyen of IT Industry, was insightful enough to see IT services as an industry. This was really an outcome of the consumer Insight that C K Ranganathan, the Founder had. Computer programming at that time was seen as an intellectual and analytical endeavour largely limited to analytically smart people. FC Kohli’s insight led to the birth of modern IT industry with structured programming, Quality Management System (QMS) and large scale rapid training of averagely intelligent people into the rigors of programming. His insight enabled an average person to add 82

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value in an industry that was reserved for the elite. Top leaders constantly discern market, social, industry and consumer trends way ahead of others. i4 - Imagination Effective leadership involves working with imagination and being unconstrained by resources. Leaders with imagination have their eyes not only on the task at hand, but also focus on the horizon. They have the ability to build scenarios, see the bigger picture, think strategically and come up with out of the box solutions.

Imagination 10

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C.K. Prahalad used his imagination to draft ‘India@75’. It is one of the most comprehensive and popular ideas in India today. It seeks to create a movement where everyone can get involved into realizing the dreams of our country. A.P.J. Abdul Kalam is another leader who used his imagination to draft ‘India 2020: A Vision for the New Millennium’; which offers a vision of how India can emerge to be among the world’s first four economic powers by 2020. Such leaders possess the ability to look into the future and create scenarios which act as an inspiration for others to follow. To be able to build effective leadership vision and garner support on the initiatives, imagination is a crucial tool. i5 - Intensity Ram Charan in his book, ‘Leadership in the Era of Economic Uncertainty’, reiterates the need for intensity as a leadership trait. I believe leadership is about intensity as demonstrated in passion, drive and

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involvement in the task ahead. Without this intensity of thought and action, leadership will have little influence. This intensity translates itself into rapid force with which organizations adapt to changes in the business scenario.

motivate people to achieve more than they may have ever dreamt as possible. Inspiration is the spark for motivation that leads to action. Leaders motivate others for a common purpose and inspire others to do things normally beyond their realm.

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In 1996, Hyundai, then an aspirant in the Global Auto industry, decided to enter India. Most industry analysts were more enamoured by other auto majors. However, the intensity with which top Korean Leaders, who were deputed to India, pursued their audacious goals and ensured that they captured the heart of India, made all the difference. The Korean leaders went about understanding the Indian consumers’ mind, designed a World Class Car, developed an ancillary base, recruited top talent and invested in a stateof-art facility. The result is that their Chennai complex, in just a decade, reached an annual production of over 500,000 cars. The result is, today they are 10 times bigger in India than the US auto majors. What differentiated the two teams was the passion and intensity of the top leaders. Therefore, intensity as exhibited in the speed with which companies respond to changing business needs is extremely critical for growth. i6 - Inspiration Leadership does not operate in isolation but in continuous interaction with others. Leadership derives its very meaning from its association with the ‘other’ – the followers. By becoming an inspiration for others, leaders create a shared vision, get others to commit to the common goal and

The best example to demonstrate inspiration as a trait of effective leadership is Mahatma Gandhi, who without any military aid, economic force, violence or devious politics got the British to leave the country. Gandhiji‘s non violent ways and peaceful methods were the foundation for gaining independence from the British. Through his own moral values and belief in ‘Satyagraha’ he was able to create a common vision amongst different castes and communities of India. He inspired the common man to rise above his abilities and contribute to nation building. By his pursuit of truth and non violence, he became a role model for the masses and led the nation to freedom. Therefore, inspiration is imperative for good leadership. Through inspiration, leadership enables others to emotionally commit and identify with the goals, leading to success. i7 – Influence Influence is a key component of Leadership. Being able to persuade others, build consensus amongst the contending parties, create a cohesive team and collaborate effectively are keys to influential leadership. An example of influence is illustrative in the case of Dewang Mehta, ex chief of April | 2009 NHRD Network Journal

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NASSCOM. He played an important role in lobbying with the Government on behalf of the fledgling Indian software industry. Mehta’s knowledge of the correct people to lobby and his collaborative stance with IT-related departments enabled him to gain concessions, while other industries struggled. Recognizing the potential of the software and services segment as a major foreign exchange earner, Mehta launched the India Inc. crusade, where he personally presented the country’s software industry to the world. Besides a dream for the software industry, Mehta had a blueprint for the IT industry and how it could be used effectively to change the lives of India’s teeming millions. His vision was achieved through his influence and this is reflective in the fact that India is one of the leading providers of IT services in the world. Leadership talent is closely related with the ability to influence, not just the consenting parties but also the dissenting parties. To develop leadership skills, it is imperative to develop the ability to persuade others and collaborate effectively. i8 - Impact To a great extent, leadership is about impacting others and getting them involved in the task ahead. Since leadership is based on interaction with others, it is important to build connect. In this, communication plays a vital role. Clarity of thought and the ability to communicate effectively is pivotal in developing leadership competence. Barack Obama, the President of United States, is someone who has risen from wilderness in just over two years and today has become a person to reckon with. 84

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Although Obama always stays cool, his speeches energize the audience and stir the mind. Having heard Obama first as a candidate and now as the President, people around the globe have put their faith and hope in him. His powerful communication style creates maximum impact on people across the globe.

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Therefore, leadership is not just about an inherent value or substance but also about outward style which makes it attractive and impactful to the masses. Communication becomes as important as any other trait of leadership, as it connects people and creates impact. i9 - Integrity There is a common theme among research papers written about leadership in recent times - Leadership and its relationship with integrity. Effective leaders serve as role models who are looked upon to set examples and lead. Integrity is that factor which makes leaders trusted, helps them build credibility and create an impact on the masses.

Integrity

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The Tata Group has been in existence for over 100 years and has always focused on integrity as an important value for the organization. The Tata Group not only has a code of ethics, but a Code of Conduct, which specifically addresses behavioral expectations from employees- right from

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the CEO to the staff level employees. The Tata group has ensured consistency of exhibiting moral values & integrity across its illustrious life span and in all its dealings with numerous stakeholders.

towards excellence is exhibited in the turnaround speed of projects – he rebuilt the Pamban Bridge after it was washed off in a short period of less than 60 days, when the mandate given to him was six months.

In 1956, Lal Bahadur Sastry, the then Minister for Railways, set an example of constitutional propriety by submitting his resignation as Minister, by owning up moral responsibility for the two rail accidents.

Varghese Kurien, father of the white revolution, driven by the challenge left his government job and set up Amul. He gave autonomy to the farmers and under Kurien’s leadership, India became the largest producer of milk in the world. What differentiates both these leaders is the edge of ‘independence’ - of themselves and their followers. Thus, Effective Leadership is preceded by a relentless pursuit towards excellence, equipped with the tool of independence of thought.

Effective leadership flows from the display of the highest standards of integrity in all types of situations – normal and high stress. i10 - Independence Finally, Leadership stems from independence of thought. Self motivated leaders who have an autonomous way of thinking and executing their plans come up with original models and their conviction paves way for leadership success. These leaders have the edge which makes them distinctly stand out from the crowd.

Independence

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i of Leadership

E. Sreedharan, who is more than 70 years old now, is the architect of the metro rail project in Delhi. It is well ahead of schedule and the pace of work is admirable. His success is driven by his independent streak and self motivation. His relentless pursuit

The 10 principles highlighted are not meant to be a judgment on all the traits a leader must possess. However, based on my personal experience as well as my observations of instances of great leadership, I believe that the elements of the i 10framework encompass essential attributes that have served leaders well in the past and are bound to prove their worth if applied in the right context and in the appropriate manner. I would like to conclude with a quote of one of the twentieth century’s greatest management writers, Herbet Casson, “The men who succeed are the efficient few. They are the few who have the ambition and will power to develop themselves”. I hope the i10 framework acts as a guiding force for all of us to develop and transform into effective leaders.

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Custodians of human capital of their organizations, leaders of the critical human resources function, creators of shared vision and alchemists who nurture and develop the latent potential comprise this section of contributors, a veritable galaxy of people who truly matter to people who truly matter. The invitees include some of the finest human resource leaders in the country including Vijay Bharadwaj (Dell), Aquil Busrai (IBM), Rajeev Dubey (Mahindra Group), P Dwarakanath (Max Group), Adil Malia (Essar Group), Anand Nayak & L Prabhakar (ITC), Vivek Patwardhan (Asian Paints), Satish Pradhan (Tata Group), Sanjeev Sahi (Hindustan Aeronautics) , TT Srinath (Pegasus), and Inder Walia (Bharti) who have distilled decades of experiential knowledge into eminently articulated expositions of leadership thought.

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LEADERSHIP DEVELOPMENT PROCESS IN AN ORGANIZATION TO SUSTAIN BUSINESS GROWTH AND LEADERSHIP VIJAY BHARADWAJ Abstract Different business environments call for different approaches on part of leaders. Taking changing business paradigms into consideration, organizations need to constantly revisit their leadership strategy and put in place appropriate development interventions. This article explores the tenets and constituents of the leadership development process in the context of ‘environmental realities of the market place’. In order to develop leadership potential, organizations need to provide structured programs and ensure top managements’ commitment. About the Author Vijay Bharadwaj is currently Vice President and Head Human Resources for Dell India and Dell International Services. His experience includes leading the Human Resources function for an international banking and financial services major, an Information Technology bellwether and a Chemical and manufacturing organisation. He has specializations in Industrial Psychology and Personnel Management.

The last few months have seen one of the worst economic crises unfold in front of our eyes resulting in once venerable organisations biting the dust and the whole world plunged into an economic downturn. The spotlight is on senior leadership and critical, high performing talent and their actions in each of these organisations. ‘Leading’ is one of the most demanding and arduous tasks for an individual, and the leadership journey is a difficult process filled with many catalysts and inhibitors. A bit like human development, the leadership development in an organisation is a process influenced by intrinsic individual factors and a significant set of external parameters. 88

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These external factors range from what is happening in the business landscape in general to the organizations own ambitions to deal with survival and growth. Organizations constantly endeavor to develop their band of asset-generating leaders who combine astute business acumen with caring team building skills. Organizations expect them to use a blend of knowledge, skills, business acumen and economic intuition, to make business decisions and develop leadership bench strength in the company. While most of the leadership development literature focuses on development of competencies innate or intrinsic to an individual, I would like reflect upon how some of those efforts need

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a contextualization with the environmental realities of the market place. Good times and tough times … The business landscape poses immense challenges to leaders and provides opportunities during both prosperous and difficult times. Organizations need to revisit their drawing boards to strategize what best to do, to stay in control in either situation. Every time the economy sinks, as in the current recession or rides a surging wave, a new business reality emerges. How agile the organization is to capture new opportunities or the kind of absorption capability that it can develop to suffer the slings and arrows of business cycles, adds immense value to the leadership in an organisation. As a few organizations are discovering today to their discomfort, their managers and leaders have no experience of managing the current economic down turn. On the contrary, those organizations who have been through these times quickly recognize that new business opportunities exist even in recessionary times. The current breed of young leaders in India, who are used to coping with pressures associated with economic growth are now faced with the challenges of managing a downturn. Changing course from building scale to focusing on efficiencies is a development process which no class room simulation can provide. From an organizational point of view, these are junctures where structured processes and systems need to be quickly put in place to enable appropriate development. Rather than leaving it to the individual to cull out his own learning and adapt, organizations need to support with concrete programs and timely inputs aligned to the requirements of business strategy. Organizational DNA differentiating Successful companies from the Also-rans ... Every organization has it own cultural thread that links the various business

processes and creates a broad out lay of “How we do things here?” The working ethos, high business performance standards and the resultant organizational language it creates, makes an immense impact on the development of various business competencies of its people across the hierarchy. We constantly hear that ‘winning teams create winning behaviors in their players’. The winning or losing streak of organizations creates profound behavioral changes in their leaders and the employees unconsciously synchronize their behaviors with their leaders. An organisation that is seen as an also-ran develops to the contrary, often a negative set of values and behaviors exemplified by defensiveness, lack of an entrepreneurial streak and fear of failure. Such an organisation often develops the notion that ‘leaders need to know all the answers’ concentrating decision making at the top and a lack of a “can – do” spirit in the lower levels . It becomes important for the owners of the leadership development process to objectively analyze these patterns, reinforce positive behaviors and ensure that the top management demonstrate the required competencies through their actions. Growth companies and static or shrinking companies … Organizations in various stages of the business cycle – growth, stagnation or decline, would tend to have different ways of dealing with their conditions with resultant effects on the leadership development process. Growth companies present multi-fold opportunities to its leaders to experiment and whet their risk appetite. Static/shrinking organizations breed behaviours which are not conducive to developing leaders. They do not realize that by cutting back on investments in leadership development they cut themselves from opportunities of breaking out of the vicious cycle of self defeating April | 2009 NHRD Network Journal

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behaviours and resultant organizational decline. There is little realization that leadership development would encourage their natural tendency to innovate, experiment, learn and grow helping them embrace the virtuous cycle of growth and progress. Finally the people … People selection in organizations, on the basis of educational achievements and the pedigree of the educational institutions serves the limited purpose of ensuring a basic fit. Gauging an executive’s fit for the current management tier and his potential to perform at levels above is another matter, and best done in actual work settings. Over time, individual performance helps identify various competencies, skills and gaps of employees, giving the organization a clear picture of the investment that is needed to sculpt potential leaders for the future. This process needs to be carried out very carefully over a sustained period of time as mistakes could prove very costly. The objective of the leadership development programs is to convert high performing employees with high potential into leaders who can handle growth and related complexities with integrity and a commitment to organization values. A complex interplay of these intrinsic and extrinsic factors create the environment in which organizations grow leadership talent to reach their true potential. In turn only those leaders who have potential, help the organization achieve business leadership and success. Leadership development process The objective of the leadership development in organisations should be to provide opportunities for talent to grow through structured experiences in a learning environment. The basic content of the program should ensure that the 90

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individuals get the requisite skills and the knowledge to develop future capabilities. As far as possible the learning route map must allow the individual to select his learning style. The detailed structure and processes of development blending hard exposure to business problems with softer aspects like mentoring and coaching ensures the right combination of Yin and Yang. Corporate training programs and the executive development programs conducted by business schools can help in imparting basic management skills though not contextualized to specific requirements of say a software service provider or a farm equipment manufacturer. At best they help executives with a beneficial brush up of business fundamentals and learn from the experiences of benchmark organizations. The design of leadership capability development program must be carefully and deliberately undertaken by organizations themselves. Acute awareness of organizational business, market realities, organizational culture and competency requirements are essential to create these programs. A successful leadership development program designed for a multiproduct, multicountry, computer hardware producing company is unlikely to create a leadership pipeline for a local Indian pharmaceutical company and vice-versa. Management experience forms the fulcrum of a robust leadership development process. The key imperative of such a process should be to create learning situations and experiential simulations where the individual can find a rigorous exercise of leadership competencies. Here are some ideas for you to look at: • Leadership competencies Every company has its own take on what they want their leaders to accomplish. This wish list needs to be

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broken down into a series of winning behaviors. These behaviors can be further grouped under various leadership competencies. These leadership competencies become the recipe for the development process. They provide a level wise set of requirements to the development process and also guide the design of the development process. These competencies need to be constantly scrubbed against the ever changing market situations and matched with new realities. • Leadership Kindergarten The fundamental tenet for every nursery or kindergarten is to create experiences around what a growing child needs to learn in the most supportive of environments. What organizations need to do is to create leadership nurseries for their employees - opportunities where the individual can work and learn. The essence of these programs is also to design experiences where the individual has to exhibit these leadership competencies to solve and manage real life work situations. The experiences need to be created around class room training and board room interactions. The experiential learning that occurs in organizations based on how they are grappling with the economic environment and their success or the lack of it with strategies they had adopted is in itself a great learning laboratory for leaders to develop their capabilities. • Leadership Mentors A good practice to follow in these programs is to assign a leadership mentor. These mentors need to be professionals in the organization with high credibility and whom the entire organization admires and the junior

management wants to emulate. Constant interactions with these role models reinforce various management behaviors and also serve as opportunities where the individual can use the mentor as a sounding board for bouncing off ideas and doubts. The role of the mentor is to also probe the various actions of the individual and delve deeper and ask questions on the rationale for various actions. These dialogues need to tease the reflective analysis skills of the individual and help him or her to question various exhibited behaviors. Reflective observation lays a key foundation in building the ability in the individual to cement his learnings from various diverse experiences and also connect them to the larger the structure in his / her mind. • Leadership Coaching While mentoring helps in the tutoring process, a more personalized approach is the leadership coaching. The coach helps in enabling the individual to examine his strengths and gaps and work towards closing those gaps with suggested inputs. Such close interactions with leaders help in building confidence in the individual and also help to explore what suits best from him or her preferences - behaviors that suit the individual strengths of the person. • Leadership Musical chair There is no substitute for the exposure to different positions – with the changed job description and different expected work outcomes – it contributes to the overall development of the individual into a well-rounded professional. The metaphor of the different chair in each round is for the change assignments and the reducing number of chairs denotes the move up in hierarchy. This also helps in fostering a general April | 2009 NHRD Network Journal

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management outlook in the individual rather than the targets and pressures of the respective function of business unit. In an organization known for developing leadership talent, this often is a well organized process with new assignments being given to developing leaders almost with a clock work precision.

discussion. Whether it is the water cooler chat or the coffee table tête-à-tête, these discussions are indispensable in creating an atmosphere of positivity within the organization. Creating storyboards for teaching difficult subjects like ethics and values in an organisation is the most effective way of internalizing these learnings.

• Leadership Podium An exposure to formal senior management meetings and learning opportunities with the top management of the organization builds confidence in the person. It also provides an opportunity to interact and get the views of the wider leadership community. Organizations need to have a structured program where the individuals get opportunities, on a periodic basis, for formalized learning sharing capsules. When this process is embedded in the operational fabric of the organization, it serves as a regular experience reckoner. In such organizations leaders provide opportunities to promising talent in their teams to make presentations to senior management forums instead of doing it themselves.

• Leadership level execution skills The programs and initiatives in a successful business organisation have a serious focus on execution. Although organizations have several implementations going on at every point of time, what they lack is the discipline to create a robust feedback and control dashboard which also encourages the rigor of project management on to some of the less tangible initiatives. Having execution metrics is also fundamental to the sustainability of these initiatives. The organizational literature is full of examples on how great business ideas were not executed efficiently leading to wastage of resources and opportunity cost. Assigning responsibility early on for executing on complex projects can help develop a strong internal pipeline of leaders who are strong at execution as well.

• Leadership Chronicles “Education is best imparted through fables” – one cannot over emphasize this notion. Whether it is Panchatantra or Grimm’s fairy tales, we have always found their allegories build a basic sense of life, good, evil, socially acceptable actions in all its readers especially in their formative years. Leadership chronicles are what great leaders in their organization or industry did in various trying and dodgy times and how they prevailed over the obstacles. These ‘stories’ filter through the rank and file of the organization and become the subject of many a 92

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Although most of these ideas and programs are being taken up in today’s companies there are also several booby traps: o The prevalent accounting practices having a parochial view to the learning and development costs. These are not very differentiated in the organization’s financial reporting and hence a lot of initiatives fall under the guillotine of cost reduction. o Some of the management metrics encourage organizations to take

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short term tactical measures on various issues like training person days, etc leaving long term resource development plan out in the cold. Leadership is also a ‘perishable commodity’! One has to constantly look at the program and ask the question – has this competency ‘expired’? As a new business reality emerges every few months, one has to keep a keen eye on the program fundamentals and some assumptions of business which have played a role in the entire design. Finally, I believe that leadership development is definitely a board level imperative. While the implementation responsibility can be delegated, there is no substitute to top management time for the initiative. Successful organizations

are known to spend a lot of time on leadership development issues and plans. This time is clearly set aside on the annual calendar of the top management and is never swapped for more ’urgent things’. A simple review of leadership succession plans in an organization clearly sums up where it stands and whether its plans have delivered. Such organizations look proactively at the efficacy of the leadership development program on the one hand and emphasize the importance of the initiative in every management forum down the line on the other. This helps in making all the current leaders in the organization sensitive to the need for leadership development. Successful companies make leadership development a part of their long term business objectives. And that is secret recipe for their success.

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LETTER TO A YOUNG PROFESSIONAL AQUIL BUSRAI Abstract This article is in the form of a letter written by the author to a young professional on qualities that make a good leader. About the Author Aquil Busrai is Executive Director Human Resources with IBM India. He has over 36 years HR experience, both in strategic and operational HR with blue chip organisations like Unilever in Kenya and India, Motorola in Asia Pacific and Shell in Malaysia. He is the National President for National HRD Network.

Dear fellow professionals, Thanks to the delayed flight that you and I had a chance to chat up last week at the airport. I was intrigued at your repeated questions about qualities of a good leader and could not help but notice how you were trying to correlate those qualities with success of leaders in real life. It had me reflect on my own observations over all these years and it offered an opportunity to dwell on qualities that I have appreciated in many good leaders that I have had the privilege to work with or closely observe. Then came this invitation to write an article for the Network journal. I decided against the idea of writing an article on leadership and instead went back to our conversation and my subsequent reflections to capture the essence of leadership in practice. The result was a list that I would like to share with you. Successful leaders are those :

• Who can work with high level of comfort in a culturally diverse environment • Who recognize their own derailment factors honestly. And act on it • Who ask for larger and more complex roles • Who let their expectations be well known to their team • Who have a good Mentor and who use them with regular frequency. And attend their meetings well prepared. • Who create a strong and workable plan for work-life balance • Who own their career themselves and consider the organizations as a facilitator • Who take charge of the situation and hold themselves accountable for its outcome

• Who are fiercely passionate about their profession and are proud of it

• Who use the systems available in the organizations but questions its efficacy from time to time

• Who consistently display highest level of integrity

• Who are geographically mobile. They have an accelerated career growth

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• Who are not bashful • Who enjoy mentoring and take pride in the success of the protégé • Who do not have fear of failure • Who do an honest and critical self assessment annually • Who demonstrate passion for their organizations

• Who delegate but hold themselves accountable • Who provide regular feedback • Who renew themselves through learning opportunities • Who emulate their Role Models consciously • Who are decisive

• Who have a T Shape expertise. Deep in one thing, general in others

• Who dare to think big

• Who own and execute on personal performance and take accountability

• Who engage their teams and involve them in decision making

• Who identify and groom their successor one who is truly able

• Who are themselves good follower

• Who define clear roles for their juniors and hold them accountable • Who realize that employees do not react nor behave the way they are expected to • Who want to be first line managers because they realize that it will provide them an opportunity to showcase their leadership skill • Who spend quality time in self reflection • Who develop and nurture professional contacts and relationships • Who leverage professional development opportunities for themselves and their team members • Who simply want to excel • Who set their own standards rather than set targets based on what others have achieved

• Who are powerful communicators

• Who demand high performance work culture and act on it • Who differentiates in Rewarding high performing employees • Who takes bold action on low performers • Who leave a legacy The above list is certainly not exhaustive. But the points enumerated are ones that have worked well for many leaders and have shaped their success. Like you, all of us as professionals keep learning in life. Many learn through observing masters at play, I hope you too come across leaders who you may desire to emulate. And then become a good leader yourself. When that happens, you may re-visit this list and add your own learning for the next generation of professionals. And the journey of learning will go on …

Yours truly, Aquil Busrai

• Who develop a large network within the organization and access it

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LEADERSHIP IN TOMORROW’S COMPANY RAJEEV DUBEY Abstract As the world shifts to a new business order where there is distrust of big business houses, less political stability and developing countries play a more substantial role, leadership too will have to reposition itself and adjust to the rapidly changing times. The article attempts to define the basic leadership traits that become necessary to steer the organization through the ‘choppy waters of such a new World’.

About the Author Rajeev Dubey is President (HR, After-Market & Corporate Services) & Member of the Group Management Board of Mahindra & Mahindra Ltd. He is also on the Boards of several Group companies including Mahindra Ugine Steel, Mahindra Intertrade, Mahindra First Choice, Mahindra Steel Service Centre, and Mahindra Retail. He is also the Chairman of Mahindra Insurance Brokers and Mahindra First Choice Services. In addition, he is Chairman of the Sustainability Council and CSR Council, and a Member of the Corporate Governance Cell, of the Group. He also serves on the CII National Committee of Indian MNCs, the CII Apex Council on Affirmative Action and the CII Western Regional Council.

A brave new world is emerging from the ashes of the current economic meltdown and while I am no soothsayer, I can safely say that we will need to create a different framework for tomorrow’s company if it is to survive and prosper in a world in which leadership will have to face challenges that will require a mindset quite different from the ones, which have worked in the past. The new world order is likely to be characterized by: • Mistrust of big business • Far less stability in economic and political affairs • A shift in the centre of economic power away from the traditional bastions of USA & Western Europe to other 96

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economies, especially the BRIC countries. • A far stricter regulatory environment • Much greater public-private-not for profit partnerships • Demand for addressing the triple bottom-line of profit, people and planet To navigate the Corporation successfully through the shifting and choppy waters of the new world order, leaders will need to rely heavily on A. Empowerment B. Innovation C. Creating opportunities in situations of apparent conflict

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This will require at least the following basic leadership traits: 1. A deep sense of self-awareness and authenticity, which genuinely encourages others to experience and unleash their human potential. Creating a culture where people are not bound by hierarchical lines of command and control, and rules which stifle the spirit of experimentation, will be a major role of the leader. This is not something which can be “put on”, a mask which conceals an actual tendency to dominate and control, for tomorrow’s employee will demand so much freedom that the mask will soon be stripped away. This freedom will be required not only because of the many specialized skills which will need to be brought together to solve problems, but of the emerging mindset of Gen Y which no longer has respect for authority hardwired in its genes. Hence we need the confident and authentic leader who people can trust, and who trusts people in turn. This authenticity and selfconfidence will depend not only on expertise and experience in multicultural settings, which will increasingly become an essential part of the leader’s armory, but also on an evolved and “centered” spiritual core. Thus the intellect, heart and soul need to work in tandem and fire on all six cylinders if the leader is to be able to genuinely empower his people. 2. Genuine respect for others, and the compassion required to see things from the other’s point of view, without which the leader will not be able to create and sustain a culture of empowerment and innovation. This requires an open mind and open heart, the ability to be genuinely non-judgmental and be able to focus on issues not personalities, build on strengths and not only seek to remove weaknesses.

3. Innovation requires people to be given freedom to experiment and make mistakes (though within limits and not repeatedly!) It also requires the leader to show in his daily behavior the ability to do, and appreciate, lateral thinking. 4. A genuine belief that talent is abundant and not scarce, and that the leader’s basic job is to create an energy-space where latent talent can flower, and a thousand leaders bloom across the length and breadth of the organizational landscape. Clearly, talent development will become an increasingly important and timeconsuming role for tomorrow’s leader and he will be well advised to use the Appreciative Enquiry approach, where he builds on the strengths of his people instead of focusing on weaknesses and areas for improvement (which was the traditional approach) and this not only for select hi-potential executives, but for solid performers who make up the bulk of the workforce. 5. To come from a space which knows that business outperformers and concern for people are not antithetical but in fact complementary forces. Creating synergy out of seemingly conflicting forces and objectives, and the ability to create win-win situations, have been the hallmark of the most successful change initiatives I have seen. A paradigm shift is taking place where forces which were seen to be in conflict, now become rich and powerful sources of synergy and strength, as competition yields to coopetition in the age of diminishing natural resources and global concerns of climate change. 6. A genuine commitment to the triple bottomline. Till now the commitment to community and planet has been more intention than action, but the time has come when corporates will be under April | 2009 NHRD Network Journal

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increasing pressure to demonstrate that they mean and act on what they say. This pressure will come not only from activists but also from government and even investors and the response will have to be sustained over a considerable period of time for it to show measurable results. The real skill will be for the leader to convince his people that this approach has to be enhanced and will make sound business sense. Hence action covering product, process, people and community. 7. I firmly believe that this must be a mass movement with crusaders and apostles who can spread the word and instil them in the minds of the young. Not only in those who are being prepared for leadership positions, but equally in those who will serve in the value-chain right down to the grassroots level. 8. The ability to connect with people, both within the organization and in the external environment, will be a critical requirement. Within the organization, since the comfort of the command and control culture of the industrial organization has been replaced by the need to persuade and influence people in flat net-worked organizations, the communication skills of the leader will become ever more important. Since communication is a two-way process, listening skills will be at a premium. In fact the leader as coach/facilitator/ counselor/guide is the new avatar which is being born. With the emerging enhanced role of government and regulatory authorities in the fortunes of companies, the leader will spend more and more of his time interacting with external constituencies. He will have to have the inclination and space to live with differing points of view and feel comfortable about it. 9. Uncertainty, violent fluctuations and co-existence of multiple forces in 98

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economic, social and political life will become a fact of everyday existence. Hence leaders will need to have the ability to deal with change, uncertainty and multi-polarity in place of the order and discipline of the industrial capitalism of the twentieth century. Wisdom and intuition will have to complement intellect and logic in business decision making. 10. The ability to deal with the multi-cultural dimensions of doing global business – people, languages, locations, beliefs, customs and conventions. The unipolar world dominated by the US, and to a lesser extent Western Europe, is slowly and surely yielding to a multipolar world where most economies are getting integrated into the global network of countries which are involved in the flow of goods, services, capital and people. Leaders who have not worked in several countries will be at a distinct disadvantage, and work experience in countries like China, India, Russia and Brazil will carry a premium. Recognizing this, leading business schools and universities are insisting on global experiences for their students and this trend will only become stronger in the years to come. 11. And yes, tomorrow’s leader will have to be e-savvy! If anyone had doubts, the latest US elections should conclusively lay them to rest: thanks to Obama. 12. For too long have too many in positions of power believed that commercial/ business success is inherently in conflict with Ethics and Values. And yet we lament the absence of ethics/values and long for a world where “success” would not necessarily mean having to sacrifice basic human decency based on trust and respect. The good news is the emerging groundswell of belief that in fact sustained business success sans

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ethics/values is not possible, even if we forget the desirability aspect of it. 13. Here too is a fundamental mental paradigm shift which practitioners and educational institutions have to work on together, if society is to survive in the brave new world where win-lose must necessarily, even from the most hardnosed and selfish point of view, yield place to win-win. Where the ability to listen, trust and respect are not poohpoohed as “soft” skills meant for the weak and ineffective, but become the cornerstone of the foundation that strong and effective leaders need. 14. Where a higher order purpose which drives people to outperform and reach for the stars, is not the realm of esoteric arm-chair philosophers, but the blood and gut of highly successful business people and organizations. Where truth, compassion and a spirit of service (Satya, Prem & Seva) are not things to be ashamed of in the world of success and achievement, but are in fact critical success factors

15. Finally, men and women in the organization are looking for purpose and meaning in their lives which go beyond parameters like profit, market share, sales growth etc. People are groping for a higher order purpose which touches and satisfies a deep inner chord, a return to basics in terms of emotional and spiritual needs even as physical standards of living rise. 16. They will look for tomorrow’s leader to infuse this purpose into the organization vision and life. 17. Clearly, this list is not exhaustive, nor is it meant to be. Nor are these attributes a substitute for strategy, vision, process and systems. But taken further, they could lead tomorrow’s company to sustained success in the brave new world.

* I would like to acknowledge Tony Manwaring for the term “Tomorrow’s Company”.

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LEADERSHIP IN PERSPECTIVE — AN INTERVIEW WITH P. DWARAKANATH by AMRITA VIJAY KUMAR Abstract A combination of mental toughness and personal humility with personal resilience is significant to be a good leader. A leader also has a high degree of emotional intelligence in terms of creating awareness, self regulation, motivating people and exhibiting empathy. Ultimately, it is to deliver what you promise, to embrace tough love and to demonstrate the human touch that forms some of the key leadership qualities. Amrita Vijay Kumar speaks to P. Dwarakanath about his leadership journey of over 30 decades, the challenges faced and the lessons learnt…

About P. Dwarakanath P. Dwarakanath is the Director – Group Human Capital of Max India Ltd, and brings rich and varied experience of nearly 38 years. Dwarakanath is a Bachelor of Science, Law and holds Post Graduate Diploma in Management in PM & IR. He has retired from GSK as Director – Human Resources and Administration, India/ South Asia after spending 27 years with the company. He is on the board of several Companies / Institutions including GSK Consumer Healthcare Ltd. He has won many awards including the “Pathfinders Award” by the National Human Resource Development Network in 2004; “HR Professional of the year” by Mid-Day in association with DAKS, London and others in 2005 and the “Career Achievement Award” by GSK International 2006. A: You were with GSK for over 30 years and experienced the entire leadership journey to being a director. Longevity is a critical factor for a leader to drive a vision for the organization. What were your experiences in this regard? D: I was a management trainee at DCM and went on to become a director at GSK. It is true that if you want to build an organization it is important to spend enough time understanding the culture, the people and the processes so that you can take them forward. Organizations are not built in a day or two. Yet looking at the contemporary scenario, I acknowledge that we need to be practical and realistic in our 100

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approach. I am also not trying to preach or advocate the concept of ‘cradle to grave’ or lifetime employment in one organization. Having said that, I believe that you need to have spent enough time in an organization in order to understand, appreciate and bring any transformational change. And when I say ‘I’, it does not mean that change is brought about by one individual, rather it is a team effort. I have had a very fascinating experience in my career as an HR professional and have witnessed very exciting times- with respect to a constant evolution of the Indian and Global business environment and the

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transformational change it brought about to the approach and attitude towards the HR profession. I started my career in early 70’s when the focus of HR was more on employee relations, fire fighting, welfare and legal compliances. Today, however, HR has grown into being a more proactive function. In the last ten years, HR has undergone a change from being a mere facilitator of HR processes to becoming a strategic business partner. I think the real test of HR in the future is to be able to “add value” to the business. What I call the ‘Dave Ulrich’ test, the ‘wallet’ test is how HR can influence your customers or buy your products or seek services from the organization at the cost of your competitor. I think HR is playing a vital role in organizations and a paradigm shift has taken place in the last decade, and there is still some way to go. To sum it up, I have gone through various phases in my career, from having a welfare orientation to fire fighting to maintaining Industrial Relations to managing HR processes to being a proactive facilitator and to being an institutional builder. A: What are the major leadership qualities that helped you grow within GSK in your stint of over three decades? D: Fundamentally for any leader or even more for an HR manager, it is important to have a high degree of emotional intelligence in terms of creating awareness, self regulation, motivating people and exhibiting empathy. However, mere IQ or sheer intelligence is not enough. Having said that, I believe it is also important to deliver what you promise. In order to deliver or execute, it is important to carry your team with you. Leadership is not one man’s effort as you walk with and through people. Apart from this, it is important to embrace the art of ‘tough love’, which is being tough on issues but soft on people. In rough times of economic downturns or

acquisitions, how you manage, motivate and retain your people becomes a key leadership quality. You may need to make tough decisions due to business imperatives but how you make those decisions painless for your people is what makes a good leader. Some decisions may be hard but if the process is equitable and transparent, employees will go with the satisfaction that the company has been fair to them. Ultimately, it is to deliver what you promise, to embrace tough love and to demonstrate the human touch which I call emotional intelligence that forms some of the key leadership qualities. A: You also experienced and steered large scale transformations - over 6 mergers. Could you please share special leadership traits / lessons that you gained from that experience? D: I think fundamentally you need to accept that change is inevitable. Embracing change and making the transition seamless and painless is what matters. One needs to look at change as an opportunity rather than as a threat. It is important to manage both the set of people, those who you could retain and those who you could not. I feel that there are five key requisites of change: Firstly, I feel that it is the Organization that is the hero and no individual is bigger than the organization. There have been great leaders like Jack Welch who have played a critical role but ultimately it is GE that stands. People come and go. Everyone works for the organization and if there is a merger or an acquisition or any transformational change, ultimately it is important to recognize that it is in the interest of the organization. Secondly, times may be difficult, but it depends on how you look at it. It is the glass half full or empty syndrome. Whether it was the Smithkline Beecham merger or the Beecham acquisition or the Glaxo Smithkline merger, what we learnt was April | 2009 NHRD Network Journal

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that you need to look at it as a positive opportunity rather than as a daunting challenge. If you have a winning attitude, nothing is impossible. Thirdly, there are some changes that you anticipate and some that you don’t. For e.g. no one anticipated a downturn two years back. Therefore in these times, team learning and sharing becomes important. Some people might become more important than the others but ultimately it is a team effort. Like in any movie, the credit goes either to the director, the actors, but there are enough number of people contributing behind the screen. Not everyone gets the Oscar. Similarly, for a drug discovery only one or two will get the Nobel Prize although there may be thousands working with them to ensure success. Hence it is imperative to recognize that everyone has contributed, and as long as you do that, team learning and sharing takes place. Fourthly, communication is very critical. Communicate to the right people at the right time at the right place, especially during a transformational change. Lastly, how you hardwire the soft stuff is what makes the difference. Hard-wire is the standard systems or processes and softwire is the values. A transformational change brings an opportunity to bring in a new culture, which was what happened during the Smithkline Beecham merger. It is very tough to bring a new culture in an ongoing organization as you need to have a very compelling reason to bring about a change. Therefore it is important to translate values into great strategies, systems or processes. The difference between a good and a great company is how you translate the values into successful deliverables. That is how Smithkline Beecham and Glaxo Smithkline were successful as we could hardwire the soft stuff into actionable. To cite an 102

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example, we said our global quest is to improve the quality of human life - be it patients, customers, clients or employees. We decided to be involved only in those businesses where we could live up to this mission. So we disposed off other businesses such as the personal care where we could not clinically prove value addition. That was a paradigm shift in our approach which was based on our mission and culture. A: You have also been the past president of the National NHRD Network. How is it different to lead a fraternity from leading an organization? D: It is a very different experience, which is not only exciting and interesting but also challenging. When you are leading a business you have structures, systems and hierarchies but when you are running a voluntary, non profitable, professional organization- with people with high caliber, leadership attributes and intellectual ability, it is important to carry people with you. Thus, the style of leadership is different as your role is more of a facilitator. The approach is more participative, transparent and open instead of the ‘tell sell’ approach. A: Another aspect that will surely interest our readers is your connection with sports. You have been a university level tennis player. What impact has that had on shaping your overall personality? D: It is a very interesting question as sports really shaped my style and outlook towards people, business and leadership. If you are a competitive sportsman, you strive to win a game. Yet at the end of the day, I realize that everything is not winning. It is how you contribute to a cause which is more important. You need to have a sporting spirit and accept and appreciate both winning and losing. Conceding defeat gracefully and striving for a win-win

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scenario even when you are losing a match is important. One of my magic moments was when we won a big tournament where at a critical stage one of the points which was supposed to be in our favor was ruled against us. Yet in the next point our opponents conceded the point. I remember this match more for the sporting gesture than for winning the match. Sports truly helps one imbibe the qualities of teamwork, sporting spirit, patience and enduring resilience. A: Being a veteran in the industry, what is your view on the evolution of leadership in the everchanging paradigms? D: I think leadership has gone through a huge transformation. To define a great leader, I am tempted to quote Jim Collins from his book ‘Good to Great’. A hallmark of a great leader is a person who demonstrates a high level of professional will and personal humility. It goes without saying that a great leader should have high degree of emotional intelligence, he must be able to deliver and carry his team with him, he should have not only business acumen, but also a human touch. But that human touch can be inculcated only when one has demonstrated high level of personal humility. Unfortunately, what we see with most successful managers is that when success goes to their head, they tend to lose humility. While they have the professional will to succeed, they do not demonstrate personal humility. By humility I don’t mean meekness or subservience. To conclude, great leaders are not just charismatic but also have high degree of professional will and personal humility. A: How does one nurture leaders in an organization and how does one instill the values of ownership, which is critical for a leader?

D: In order to develop the culture of an organization, it is critical to start from the top - which means from the CEO or business leaders. There needs to be a role model at that level who walks the talk. When culture is driven from the top and cascaded down, half the battle is won. Secondly one may start an initiative very well, but sustaining development initiatives for long is more critical. It is easy to practice something new but tough to sustain it and that is where the practice becomes robust and reliable. Constant communication at the right time in the right forums is important to enable transformation of culture. Therefore to develop leadership, one should start from the top, be a role model, walk the talk, sustain the process and communicate well. Also if you don’t keep scoring, you are just practicing. It is important to measure how the organization is performing and how the people and the culture are getting impacted. When I was looking for the position of Director HR at Glaxo Smithkline, one of the questions I was asked informally is ‘Having been with the company for so many years, how many people have you developed? Who are they and how did you develop them?’ A good leader is one who should not feel insecure to develop the second line of leadership. The leadership pipeline is very important. I believe that experiential learning is the best way to grow and nurture talent. A leader should have the ability of story telling where he can share his experiences to coach others. I think apart from coaching, mentoring, sharing feedback or inputs - storytelling is a great way to nurture talent. A: Talking of leadership development, what is your opinion on it and its current state in organizations today? D: In my view leadership means leadership at all levels and one can’t suddenly develop April | 2009 NHRD Network Journal

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leaders at the top level. In GSK, we have a concept of grow your own timber. Secondly, we believe that everyone is committed and everyone can contribute. Thirdly, one should develop oneself and others since developing oneself is the first step to be able to develop others. Also, one cannot develop others through positional power, it comes from one’s personal influence. A combination of personal power through one’s position can help nurture someone. Therefore, continuous learning at any stage is important to gain acceptance. To sum leadership development - catch them young, realize that leadership is at all levels and develop self and others. A: Are there any leadership theorists or leaders that you do admire? If yes, what has been their influence on you? D: Personally there have been a couple of leaders who have had an influence on me. One of them was the managing director at GSK, who was my role model, apart from my father, who taught me the art of ‘tough love’. I feel that to be a great leader, one should not have any bias. Ones actions should be based on fair play and equity. I am also very impressed with what Jack Welch has done for GE, by nurturing talent across levels, focusing on creating learning centers and developing GE as a great organization. A: As a leader how do you define your first principles and how do you live by them? D: I think that firstly it is important to develop trust as nobody will accept a leader whom they can’t put their trust in. And trust cannot be built in a day; one has to consistently walk the talk. Secondly, it is important to have the competence to deliver what you promise. The third important principle to live by is executive intelligence. Executive intelligence is not academic intelligence. 104

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Instead it is constitutive of how one accomplishes the task of leadership, how one works with people, and how one can evaluate one’s own attitudes and behaviours and make necessary adjustments from time to time. A: What is your opinion on the role of a follower vis-à-vis the role of a leader? D: A good leader is also a good follower. Unfortunately, some of the great teams in sports fail because everyone is a great leader but not a great team player. It is important to recognize that depending upon the situation, someone else may have better competence or knowledge to manage the requirements. Being able to accept others leadership, being able to learn and leverage from their strengths despite being in the position of hierarchy, is the hallmark of a good leader. And that can happen only with a high degree of emotional intelligence and personal humility to be able to understand and appreciate one’s strengths and weaknesses. Unfortunately leaders feel that their competence is greater than others on every aspect, but it may not be the case. Accepting that someone below may possess certain skill that I probably lack, is critical awareness. A: Do you plan to write a book on leadership yourself? D: Yes, I am planning to write a book on some of my experiences. The book is titled Mali to Maalik. If you ask me what HR is all about, it is being able to handle every one right from the Gardner to the CEO. It concerns how you handle the entire bandwidth of employees from lower to the higher levels. Managing diverse workforce from a global context is important, not only from an inter and intra-cultural context but also managing different types of people in the same organization, country or geography.

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A: After so many decades in the industry, what keeps you going… D: I think what keeps me going is emotional energy. I realize that there is always scope to learn as long as one enjoys what one does. What I am learning at Max as compared to GSK is entrepreneurship skills, ability to take risks, make quick decisions and the abililty deal with multi sector business in a big conglomerate. These challenges keep me going. A: Any message to youngsters who aspire to be leaders some day. D: Our country is fortunate to have a talented bunch of people. There are many who are being groomed to be leaders. I think those who aspire to be leaders

should be focused. They should also develop the ability to take decisions, one out ten may be wrong, but the ability is important. Also, one may be able to demonstrate business acumen but giving a human touch is equally important. I feel that a combination of mental toughness and personal humility with personal resilience is significant to be a good leader. To sum it up, I feel that there are four kinds of people. First are those who watch things happen, second are those who don’t know what is happening, third, those to whom things happen, but the distinguished minorities are those who make things happen.

Interview conducted by Amrita Vijay Kumar, Senior Consultant - Human Capital, Ernst & Young.

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CORPORATE “UBERMENSCH” – A VIEW FROM ETHEREAL TO THE REAL… ADIL MALIA Abstract Drawing from Friedrich Nietzsche’s concept of the “Ubermensch”, literally translated as “Superman”, the article attempts to define the characteristics of the ‘Corporate Super Achiever’. It touches upon the unique strengths of the modern corporate leader who stands out from the others and energizes those who surround him. The article also suggests a way forward to develop the ‘Ubermensch’ for the future times to come.

About the Author Adil is the Group President - Human Resources at Essar. He has a Bachelor’s degree in Commerce, a Bachelor’s degree in Law and a Master’s degree in Personnel Management and Industrial Relations from Tata Institute of Social Sciences. With 29 years of global experience spanning geographies in India, South-West Asia, Middle East and the U.S., Adil joined the Essar Group from Coca-Cola India, where for 9 years he handled different assignments, last of which was as Senior Vice President (HR) for India and South-West Asia. Adil is a trained facilitator and a certified trainer. He has done extensive work in areas of Strategic Leadership and Organisation Development in multi-cultural business environments with large MNCs and Indian organisations. Friedrich Nietzsche, the 19th century German philosopher and classical philologist, for the first time indicated about ubermensch in his book “Thus Spoke Zarathustra”. The book’s protagonist - “Zarathustra”, contends that “man is something which ought to be overcome”. All beings so far have created something beyond themselves; mankind should not ebb this great flood and continue to strive to transform and create something higher than itself. This is the central philosophical theme. “Ubermensch” literally translated means “superman”…the wholesome, most competent, strongest and morally upright 106

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figure of modern times. Jerome Siegel modeled the central character of his creation, “Superman”, on the basis of Nietzche’s idea. The racist villains in history have attempted experiments in selective breeding, genetic engineering, cloning and nano-technology to create a superior race (Hitler et al). Their experiments miserably failed. In fact, such experiments were bound to fail as these short-cut attempts were based on developing superior performing races through unnatural engineering and birth rather than the laborious alternatives of scaling competencies, endeavor, toil, efforts and training.

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The contemporary corporate universe has demystified this ethereal superman. Over the last few decades, the corporate world has experienced the presence of many such “ubermensch” - wholesome and competent men of blood - flesh and bones, who in their own chosen fields of management practice, have excelled and performed incredibly beyond the set thresholds of performance known to mankind until that time. I have personally known and worked with some of these ubermensch. I have also worked with some self-proclaimed corporate supermen who claimed to be game-changers, but, who changed the game such that they lost their winning advantages. Whilst it is true that no two leaders have the same sequence of strengths from amongst the zillion competencies and abilities required for success, what makes the critical tipping point difference for the corporate super achiever? His country cousin may have studied in the same institute, read the same books and yet, may not be able to match the same success. Leaders may have identical expectations, but the way they reach their goals is always dependent on the unique configuration of their strengths. One sees three clear trends and predictable patterns in their footprints, and therefore, an opportunity to learn by imitation. Corporate ubermensch are endowed with this ubiquitous relationship with the intangible. They see the invisible. They spot potential winners and faint trends before their rivals or customers do. They are able to clearly see through a mirage, spot the distant land, smell the scent of an opportunity, read the unwritten messages and lucidly read the personalities of people they interact with. This intuitive perception is what makes them spot corporate talent even on soccer fields and take decisions to gamble their monies on dreams which earn

them “insane” sobriquets, until that barren land transforms itself into a gold mine. Then they call him a visionary! Ability to pierce through the superficial, sense underlying signals and uncover hidden value is their unique ability. “Activation” in pursuit of dreams, as a theme, predominates the behavior pattern of the corporate ubermensch. Assessing and managing accompanying risks is a natural appendage of the activation process. In maniacal pursuit of their dreams, they reflect consistent, conscious and energetic action orientation, which they derive from their will power. They do not get frenzied or distracted by the myriad of the day to day. They are highly focused and energetic and come across as reflective and calm amidst chaos. Constraints can’t hold them back. And that at times, can get to be a worry…for such an action man could race for fulfillment of his dreams, removing all full stops. Superman, therefore, has to be morally upright and controlled by strong commitment to VALUES. That is what makes him an “ubermensch” – otherwise, maniacal action bias in vigorous pursuit of dreams may make his marshal ways, not necessarily scrupulous. Some Supermen I know failed this “Values” test and licked dear earth beneath their feet. Supermen emotionally influence people and mobilize resources behind their dreams. To garner people support, they use their influencing relationship skills much more than their control and command skills. They, however, do not hesitate from using them, when necessary. They have a unique ability to bond with and build longsustained relationships, which could make their people walk even through firewalls for them. They may be charismatic and may have their own ambitions and agendas but they channel their ego needs and self-interest away from themselves, into the larger goal of building their dreams and institutions. April | 2009 NHRD Network Journal

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This piece is not about Friedrich Nietzsche’s philosophy. “Ubermansch” is an icon of eclectic ideology. Contemporary corporate management literature is replete with traces of iconic men and women who reflect these ubermanschque capabilities. These supermen are flesh and bone human beings like you and me. They are not anything resembling the super characters out of science fiction movies representing such a futuristic super race. Such a corporate super race is not going to be born tomorrow. It will certainly not have an oversized brain or communicate in synthetic sounds resembling cacophonic high-end electronic musical notes. The question has always been: how do we multiply this race? The reality is that each generation of professional managers coaches the next generation. The next generation, therefore, has the benefit not only of their coaching

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but also of exposure to better knowledge and best practices through the world boom in communications. The information technology revolution equips each new generation of managers with new cuttingedge tools. The Neitchesque “super race” will therefore not be born tomorrow. It is in the making every day and each one of us is part of a chain in the evolutionary process of the creation of the “corporate ubermensch”. Therefore, each one of us is cast with a philological duty for the development of the next superior generation of managers under us. “Ubermensch” will look exactly like us and also sound like us. It is through what they can deliver in terms of quality, quantity, speed and creativity that their corporate footprints will be differentiated. Silently, we are the makers of “ubermensch”.

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THE ITC LEADERSHIP PARADIGM: VISION, VALUES & VITALITY ANAND NAYAK and L. PRABHAKAR Abstract This article recounts the story of one of India’s leading organizations that has evolved over close to ten decades from ‘strength to strength’. Leadership at ITC has been focused on increasing the organization’s longevity and enhancing its wealth generating capacity. Moreover, ITC’s leadership has been cognizant of the fact that society constitutes an important stakeholder of the enterprise and therefore contribution to society is seen as one of the primary goals of the organization. About the Author Anand Nayak, Head of Human Resource Development for ITC, has been with ITC for 35 years. He has handled senior HR assignments in the Company’s various divisions. He is also responsible for overall supervision of ITC’s Social Development Initiatives. He is a post-graduate in Personnel Management and Industrial Relations from XLRI, Jamshedpur. He is also a Director on the Board of ITC Infotech. L Prabhakar, Corporate Human Resources Manager, has been with ITC for over 14 years. Prior to moving to Corporate, he has worked in different divisions of ITC. A post-graduate in Personnel Management and Industrial Relations from XLRI, Jamshedpur, Prabhakar has 21 years of experience in HR.

ITC will complete a century of its existence in 2010. An organisation that has grown from strength to strength with the passage of each decade, an example of a living company, inspired and led by generations of visionary leaders, the quality of its leadership best manifest in the longevity and sustainability of the enterprise.

and practice, whilst leveraging the power and capability that emerge from their adoption. Leadership is expected to create and sustain the belief that the extent of people engagement has not only a direct impact on both the top line and bottom line, but also has the most direct impact on the sustainable lifespan of the enterprise.

The challenge for leadership in any living company is multi-dimensional – transforming the enterprise through its evolution and growth, whilst being strongly anchored in its philosophical underpinnings, ensuring their application

Successive generations of ITC’s leadership have, over the decades, been steadfast in their desire to increase the longevity and sustainability of the organisation and enhance its wealth generating capability to create value for each of its stakeholders on April | 2009 NHRD Network Journal

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a sustained basis. ITC’s leadership, over the years, has been conscious of the fact that society and the nation constitute important stakeholders of the enterprise. This commitment to a larger purpose was best articulated by the Chairman, Mr. YC Deveshwar, when he addressed the Annual General Meeting of the shareholders of the company in 2006 – “The potential of an enterprise for wealth creation is set apart by the distinctive amalgam of its Vision, Values and Vitality. It represents a mix of constancy and change; of a timeless core and constantly evolving strategies and processes built around the core. The effectiveness of the interplay between these complementary elements determines the extent to which latent potential is realized. The enlargement of enterprise potential therefore requires Vision, Values and Vitality to be continuously recharged through practice and insight, revalidated for relevance and tested for appropriateness to the evolving competitive context. It is the role of leadership to nurture a unique combination of the 3Vs towards ensuring that the enterprise sustains superior wealth generating capacity in an environment of escalating competitive pressures. Such leadership, in a multi-business context like that of your Company, needs to extend beyond the corporate level to the strategic business units and their constituents. Distributed leadership then engenders transformation by enhancing adaptive capability and sharpening responsiveness to change.” Vision and Mission Significant challenges, both external and internal, call upon the leadership of an enterprise to reflect on the strategy in place from time to time. In ITC, at moments such 110

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as this, the leadership goes back and asks the fundamental question – What is the purpose of ITC? Over the decades, the core purpose has remained the same, although it may have been articulated differently. ITC exists primarily to fulfill its potential and to become as great as it can be in order to pursue its Mission with unflinching zeal. ITC’s Mission is ‘to enhance the wealth generating capability of the enterprise, delivering superior shareholder value and creating value for society’. Flowing from this purpose of its existence is ITC’s Vision - a compelling Vision that creates and forges corporate identity. The overarching Vision that unifies the diversified businesses of ITC is ‘to sustain ITC’s position as one of India’s most valuable corporations through world class performance, creating growing value for the Indian economy, society and the company’s stakeholders’. The Vision imparts a larger purpose and meaning to individual endeavour. It is aspirational, unifying and motivational. Envisioning a larger societal purpose has always been a hallmark of ITC, described by the Chairman in the past, as “a commitment beyond the market”. ITC articulated its Vision appropriate to the Indian context, tailored around the deep rural linkages that characterize ITC’s value chain relationships. This compelling Vision of enlarging its contribution to Indian society has powered ITC over the past decades. Such a Vision is manifest in multiple forms, significantly reshaping ITC’s profile. The Vision requires each of ITC’s businesses to attain leadership on the strength of international competitiveness. Simultaneously, it has driven ITC to also consciously contribute to enhancing the competitiveness of the larger value chains beyond its own operations. This broader commitment has led to the creation of unique business models that synergize

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long-term shareholder value enhancement with fulfillment of a larger societal purpose. It has expanded corporate consciousness in the practice of trusteeship to ensure sustainable wealth creation through contribution to the ‘Triple Bottom Line’. Towards this end, ITC has a clearly articulated Vision for sustainable development encompassing economic, social and environmental capital. The leadership participates in the cascading of this Vision and helps in translating it into meaningful and challenging goals and objectives. Progress on these goals and objectives on each of the three dimensions of economic, social and environmental capital is audited by internal and external auditors and then reported to stakeholders through the Quarterly Results, Annual Report and also the Sustainability Report published as per GRI Guidelines. It is this superordinate purpose of creating growing value for Indian society that has inspired ITC’s human resource and aligned their collective endeavor by providing unity of purpose across the organisation. Values Values refer to the institutional standards of behaviour that strengthen commitment to the Vision, and guide strategy formulation and purposive action. The core Values of ITC are shaped around the belief that enterprises exist to serve society. In terms of this belief, profit is a means rather than an end in itself, compensation to owners of capital linked to the effectiveness of contribution to society and the essential ingredient to sustain such enlarged societal contribution. It is pertinent to highlight two unique dimensions of ITC’s Group Philosophy. ·

Trusteeship ITC will act as a trustee for all its stakeholders – consumers, dealers,

suppliers, associates, employees, investors, Government and society. It will harmonise their diverse needs and aspirations to achieve the greatest common good and equity. Thus ITC has embraced an extended role of trusteeship that reaches beyond the assets reflected in the balance sheet to encompass societal assets. For the leadership and employees at ITC, exploring the ramifications of managing an entity, which is alive, with the intent of handing it over to their successors in better health than when they received it, is a challenge on the one hand, but also something that is deeply gratifying. ·

Nation Orientation The defining trait of ITC, is its deeply ‘Indian’ character that aligns corporate strategy to national priorities. Such a character flows from the Indianness of its soul rather than the origin of its capital. As a premier ‘Indian’ enterprise, ITC consciously engages across the value chains towards maximising benefit for Indian society. Such a combination of Values determines choice of corporate strategy, orients such strategy in favour of Indian value chains wherever feasible, and engages the organisation willingly in confronting the larger societal challenges of inclusive and sustainable growth. ITC’s abiding commitment to society provides depth of moral content and infuses energy across the enterprise, thus elevating collective corporate effort to the fervour of a mission for the ultimate benefit of all stakeholders. This over-arching Vision of the company and a stated philosophy is expressively captured in its corporate positioning statement: ‘Enduring Value. For the nation. For the shareholder.’ April | 2009 NHRD Network Journal

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The corporate campaigns over the years have also reflected this ethos – o ‘Let’s put India first’; o ‘No stops for India, No stops for ITC’; o ‘ITC – Working for you, Working for India’ Vitality A compelling Vision and strong Values by themselves could not have radically transformed ITC without the Vitality that enables robust strategy formulation and world-class strategy execution. Vitality in ITC is manifest in many ways including strengthening its competitive capability, the deepening of its consumer insight, breakthrough innovations in products and processes, the ability to rapidly absorb knowledge and harness technology, the widening bandwidth of distributed leadership, a growing nimbleness to proactively manage change and the ability to adapt continuously to leverage market opportunities. The amalgam of Vision, Values and Vitality is best demonstrated in the strategies of growth, development and governance. Growth Strategy When the present Chairman, Mr. Y.C.Deveshwar, took over the reins of the Company in 1996, it was a time when the winds of liberalization and globalization were driving the expectations of shareholders. It would have been tempting for many an organisation to jump onto the bandwagon and look at the short-term to maximize returns. Under the leadership of Mr. Deveshwar, however, management opted to take the road less travelled and made the more difficult strategy choice of creating multiple drivers of growth, leveraging opportunities in the emerging Indian economy that best matched proven internal capabilities. It also meant rationalizing the business portfolio. It 112

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required tremendous courage and conviction to adopt a strategy, which seemingly was not in sync with the thought process of sticking to the knitting. What emerged was a ‘three-horizon growth strategy’ – • Horizon 1 - Defend and expand current products, markets and capabilities and maintain leadership status • Horizon 2 Blend skills and competencies residing in different businesses to create new engines of growth • Horizon 3 - Create new capabilities for viable businesses in the future Rationalizing the business portfolio posed a formidable challenge of enabling the various businesses make the transition from competing in a relatively protected environment to winning in an intensely competitive and rapidly globalizing market on the strength of superior value propositions. Responding to this challenge meant engineering a paradigm shift in the corporate mindset. The entire organisation had to be realigned to a new focus, namely acquiring international competitiveness in cost and quality in each of ITC’s businesses. Such realignment was given shape to, through significant investments in technology, processes, innovation and brands; and crafting a strategy of organisation based on the governance principle of distributed leadership to unleash the entrepreneurial energies of ITC’s high quality human resource. Strategy of Organisation A strategy of organisation was put in place that has enabled ITC to ‘focus’ and ‘diversify’ rather than having to exercise a choice between ‘focus’ or ‘diversify’. The underlying principle of creating new avenues for growth by blending skills and capabilities drawn from different parts of

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the ITC Group, has in turn spawned newer competencies, thereby imparting a multiplier effect to ITC’s growth strategies. The challenge, therefore, has been to ensure focus in each business whilst facilitating integration at the appropriate level to harness Group synergy. Governance was identified as a cornerstone to manage the diversified portfolio. A three-tier governance structure was put in place, with well-defined focus. • Strategic Supervision by the Board • Strategic Management by the Corporate Management Committee. This role essentially focuses on mentoring businesses, mobilizing group and external resources, and monitoring performance • Executive Management by the Divisional CEO and Divisional Management Committees This governance structure has enabled the company to pursue new avenues of growth without diluting the focus on its existing lines of business. The emphasis on distributed leadership facilitates a decentralized strategy of organisation that enables the executive management of each business to relentlessly pursue the task of attaining international competitiveness by focusing on its unique skills, unencumbered by other priorities, but within a framework of effective accountability. This strategy of organisation also places top management in the unique position of being able to assume the character of a holding company with the mindset of a venture capitalist, mentoring existing businesses and engaging in strategic supervision of the various businesses. This has also called for Head Office and the Corporate Management Committee to refashion their roles to ensure:

• A paradigm shift from ‘How can I control’ to ‘How can I add value?’ • Not becoming the apex of a pyramid but a Strategic Centre • How each business can derive additional value from being part of the ITC Group • ‘Enabling’ and not ‘controlling’ and moving from ‘centralization’ to ‘empowerment’ • Alignment of each business with corporate objectives through strategic levers of control Distributed Leadership A time-tested belief in ITC has been “The best means of growth come from within”. This is best illustrated by the fact that the Chairman, and most members of the Corporate Management Committee and Chief Executives of different businesses started their professional careers with ITC. The focus on quality recruitment and the subsequent tiered approach to leadership and management development has helped build the leadership pipeline. Whilst these interventions facilitate the process, it is ITC’s belief that leadership development can neither take place in a vacuum, nor can business leaders be created in Management Development Centres. ITC believes that business leaders can grow and enhance their capability only in the context of actually running a business. The strategy of organisation that supports a diversified business portfolio provides a unique mechanism to ‘incubate’ and grow distributed leadership. This enables teaching and learning interactively and instinctively, wherein leaders are encouraged to process what they have learnt against their own experience and knowledge. Over the years this strategy has been further fine-tuned, wherein newer April | 2009 NHRD Network Journal

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businesses are ‘incubated’ in established businesses, not just to ensure the availability of a talent pool, but also to ensure the seeding of ITC’s core values in every new venture. And, each of the businesses are encouraged to sculpt their own three-horizon growth strategies, thereby ensuring several such horizons of growth across the organisation. In essence, this approach looks at leadership not as a position, but as a process of inclusive, collective and inter-dependent decision making aligned to the super-ordinate goal. It is this approach that has enabled ITC to demonstrate a high degree of resilience and enabled it to deal effectively with moments of turbulence. In a recent interview, when asked on what kind of succession planning process he has put in place, Mr. Y.C. Deveshwar said: “At ITC, each business has a Chief Executive. So in terms of opportunity, there is lots of it. What better succession planning can there be than people running their own businesses? In other companies there is only one Chief Executive and unless you become a Chief Executive, you cannot run your own business. In my own company, there are so many people getting experience as Chief Executives” A key success factor has been the charter based on which potential leadership is identified and developed in ITC across different levels. The process focuses on the demonstration of adherence to the ‘abiding’ factors. And, these ‘abiding’ factors in turn ensure that the organisation: • Is sensitive to the environment, which sustains the organization’s ability to learn and adapt • Is able to build a community and persona for itself • Is aware of its ecology and is able to build constructive relationships with other entities, within and outside itself 114

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• Is able to govern its own growth and evolution effectively The Integration The integrated strategy of Growth and Governance on the foundation of Vision and Values provides the Vitality for sustained growth. If one were to reflect on what leaders at the helm did to transform the organisation during their respective tenures, four key aspects emerge:• They go to extraordinary lengths for causes they believe in, for the values that the organisation stands for. They make the transformation personal, relentlessly and openly engaging others, and work towards highlighting successes as they emerge, for others to gain belief. • They demonstrate their commitment to the transformation by being consistent and resilient about their goals and passionately encouraging stakeholders to support the same. • They build a strong and committed top team, and in the process they take tough decisions about who has the ability and motivation to make the journey. • They relentlessly pursue the impact of their goals and strategies and roll up their sleeves by getting personally involved when significant financial and symbolic value is at stake. The true test of ITC’s leadership paradigm would be when the next generation of leadership demonstrates its ability to preserve the core values and purpose with the same gusto and commitment, whilst adapting business strategies and operating practices to a changing world. It is this challenge of ‘preserving the core and yet stimulating progress’ that will inspire and align future generations of ITC.

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As Mr. Y.C. Deveshwar passionately articulated in one of his addresses at the Annual General Meeting – “To be able to stand tall amidst adversity, to live your convictions and know that your actions and beliefs have transformed the lives of millions, is at once a humbling and enriching

experience. ITC is indeed privileged to be able to make a difference, and be recognized for the contribution it makes. Our abiding Vision, the strength of our outstanding human capital, and our commitment to creating enduring value will continue to inspire us as we strive to achieve even greater success in the future”

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DIMENSIONS OF LEADERSHIP VIVEK PATWARDHAN Abstract Successful leaders are not just born, but can also be made - this is the very foundation of this article. It further explores possibilities of learning leadership, and how a defining moment can kick-start a leadership journey. It takes a fair mix of a compelling vision, continuous focus on reality- in terms of numbers and hard facts, ethics which means being driven by principles and not by expediencies, courage- doing what we believe is the right thing to do and the ability to influence forms the bedrock of successful leadership.

About the Author Vivek Patwardhan, Vice President – HR of Asian Paints heads the HR function for the organization and its group companies including its international subsidiaries in 22 countries. He was appointed as ‘TISCO chair professor of Industrial Relations’ at Tata Institute of Social Sciences, Mumbai 2006-07. Vivek has published several articles on various subjects which include positive psychology, industrial relations, travelogues, and pen sketches. He has edited a book [“Kunchale un Kalam”], meaning paintbrush and pen. Vivek Patwardhan is a science graduate from Bombay University and he read for his Master’s degree in Labour Welfare at Bombay Labour Institute, now called MILS.

Leadership is a subject of interest to people of all ages and walk. Many books have been written on the subject of leadership. Most of these will make you feel that leadership is what Nehru, Gandhi, Kennedy and Mandela practised; that you can be called a leader if you have changed the course of events; and that great leaders are born. This is only half true. These books do not tell you that leaders can be made. I am not saying this but research in HR says it. And this is immensely reassuring. This means that it is possible for you and me to learn leadership and be good leaders. We can create great organisations; we can inspire a dozen people around us to be good leaders. It is not necessary that all leaders have to leave an indelible mark on 116

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world history. We can make quite an impact on the world around us. LEADERSHIP CAN BE LEARNT So the first point I want to make is that leadership can be learnt. Recently I read a book in Marathi called ‘Kharkhure Idols’, meaning ‘The Real Idols’, which covers stories of many persons not in the limelight, yet who have made an impact in the world around them. Have you heard of Naseema Hurjuk? Naseema was a simple next door girl till she was about 15 or so. Then a tragedy struck. She was paralysed and had to move about in a wheel chair. This girl who loved to dance, now had to be literally carried by others. But she was encouraged by another paraplegic who was working

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for others. She participated in the mindwheel games in London. By now, something inside Naseema had changed. She decided that she had to be independent and cannot be a burden to the family and the society. Today, Naseema runs an NGO called ‘Helpers of the Handicapped’ that has provided livelihood, independence and enormous pride to more than 550 disabled persons. She has so far been felicitated and given 32 awards. How did this happen? Did Naseema have a big target in mind? It all began with a small determination and effort. As she tasted success, she became increasingly ambitious. This seems to be the pattern in the case of many a leader. A defining moment kick-starts the leadership journey. VISION The transition from a common person to a leader is often gradual. There is a good amount of building up. The build-up is of ambition, of ability to see new opportunities and of credibility. My understanding is that the process of developing a vision itself is fuelled by passion or what one feels strongly about. So, Naseema Hurjuk felt that something must be done about the plight of disabled people. She began in a small way and created eventually a big enough way to help 550 disabled persons. We seem to think that vision is something that happens to us, like enlightenment. I have always felt that biographers tend to be unrealistic in showering praise and attributing purpose to their subjects. And that gives us such wrong notions. Developing vision is not akin to enlightenment, it is more akin to building a structure; you build it brick by brick. If we read biographies of Dhirubhai or Rahul Bajaj, it becomes clear that they too have followed this route. There are, of course, those who are exceptionally gifted and they are outstandingly

entrepreneurial. But then they are very few in number, though more visible. Vision, I am told, should be defined only in terms of intangibles. We unfortunately limit this to our professional life. We tend to think what kind of department I would like to create or what kind of institution I would like to create. How many of us pause to think what kind of family or culture at home I would like to create? I am sure that the number will not be large. The stark irony is that it matters to us more than anything else. Be that as it may. Research is increasingly showing us a way of defining and attaining the intangible targets. In his recent book ‘The HR value proposition’, Dr Brockbank discusses a step-by-step process of envisioning the desired culture within and creating it. The book talks about a process in which a large number of people can be involved in defining and shaping culture. GE says their statement of culture is speed, simplicity and self-confidence. Disney wants us to see their organisation as ‘Friendly’. Deutsche Bank prides in calling itself a ‘disciplined risk-taking organization’. This is how they wish to give theirs a persona. If this is not vision, what is it? There are others who follow what they call the ‘Obituary Exercise’. In this exercise you write down how you would like your obituary to be written. This exercise brings many questions to our mind. What is it that I would like to achieve? And remembered for? You are never remembered only for your achievements. You are also remembered because you stand for something and you do not stand for some other things. These are what we call values. This summation of your dreams about yourself as a champion of certain values and your goals is what vision is. When we talk of vision I am tempted to quote Helen Keller. You will recall that Helen was a blind person. She asked ‘Is there anything April | 2009 NHRD Network Journal

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worse than being blind?’ And she answered ‘Yes, a person with sight and no vision.’ Is leadership individual in nature or is it a collective process? Many of us think “I am the leader, and these are some of my followers.” We often tend to think of leadership as an individual performance. War films, for instance, glorify this angle of individual leadership. All this goes to shape the image of a leader in our mind as a passion-charged individual who has been able to direct a group of followers. There is no denial that there are situations in which individual performance has a place. Trouble starts when you enter industry and carry that picture in your mind. In industry, the nature of process is more often collective and not really individual. Decisions must be made after allowing an elaborate process of consultation, an opportunity to influence others and finally by gaining the ‘buy-in’ of the majority. When my department works on any policy, many employees are spoken to, many managers are consulted and their views are incorporated on the proposal before it is announced as a policy. This is essential because the best decision is the best implemented decision. But a newcomer to industry discovers that the flamboyance of ‘I say and they will follow’ is non-existent. We must reflect therefore as to how we understand leadership. For it has a profound effect on how we practise it. Martin Wilcox has put it crisply, ‘If you view leadership in the conventional way, as a set of characteristics, or behaviours, that you need in order to influence people to follow you, then you will probably focus on your own individual resources when confronted with an all challenge. If, however, you think leadership as a collective process, one that individuals with particular skills can facilitate, but that must fundamentally involve many members of the organization then you may well be able to access far greater resources.’ 118

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Koestenbaum, a great philosopher and thinker, says that leaders operate in four dimensions – The first is vision, which we have discussed. The others are reality, ethics and courage. These are four forms of perceiving that are required to deliver meaningful result. A leader envisions, but the realist in him tells him the ‘as is’ situation and the distance to be travelled to realise the vision. He must show a great understanding of ethical behaviour. Many corporate managers fall when they do not realise that their short cuts to glory are damaging to both themselves as well as the organization. And he requires courage and conviction to carry his team and influence people around him. REALITY The ‘reality’ part looks at hard facts, numbers etc. It is in that sense exactly opposite of vision. A realist knows what can be achieved, and has no illusions, is not speculative about anything. Asian Paints was established in 1942. All the major paint companies then had foreign collaboration. They marketed their products in cities neglecting smaller towns and villages. The leaders at Asian Paints realised that there was a big opportunity for business by moving to that neglected area. So, Asian Paints built a strong distribution network to reach there. In 25 years, in 1967, the competitors realised that they had lost the numero uno status to Asian Paints. Nobody has been able to reclaim it from us so far. All this appears simple and obvious in retrospect, but it takes a realistic leader to make such a decision and to break away from the mould. This game of having a vision and also facing the reality actually tears leaders between two extremes. It is like keeping one eye on telescope and the other on microscope. Many a great leaders have lost their jobs because they bungled up this

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aspect. Hitler is one of them. You have to read a book called ‘Until the Final Hour’ by Hitler’s personal secretary Traudle Junge to understand the extent to which leaders can lose sight of reality. Some people believe that when Indiraji declared elections in 1977, two years after declaration of emergency, in which she lost so hopelessly, she had misjudged reality. We are able to perceive the reality if we keep our minds open. And that is not easy when you taste success; because success leads to forming hard, unchangeable views on ‘What works here’. Then we base our action on such views irrespective of changing context. Why does this happen? Why do men in leadership positions who are well educated ignore facts staring at them? When people ignore the facts it is very often not intentional. People have a deeply ingrained habit of starting with the facts they want to believe, and then working backwards to find the evidence to support them. I have heard a social scientist say that half of the research is unreliable for this reason! There is a kind of carelessness associated with disregarding facts. And this carelessness is directed often at increasing one’s personal prestige, at proving that he knew best. This then is the problem to overcome - the sheer voracity of our appetite for recognition and self esteem. ETHICS The third dimension is ‘ethics’. This dimension is one about which many would wax eloquent but very few realise its true meaning. When we say we are ethical, we are talking about being driven by principles, not by expediencies. When we talk of ethics the immediate thought is that of corruption. These days people also remember the Enron case. But ethics should not only tell us what not to do, it should also tell what to do. In that sense, a leader must have a view about how

he is going to achieve the result, he must have a clear view about how he is going to deal with people, whether they are his followers or customers or even members of public. Our factory at Bhandup had a major accident in which the entire building housing paint-making facility was lost to fire. About 150 workmen used to work there. There was no question of giving them any job as the factory itself did not exist. We applied for permission to retrench from the Government and got it. It would have fetched a compensation of about a crore of rupees to those workers. These were dues as payable by law and they could not have asked for anything more. After a discussion with the workers, our leadership paid a compensation of five crores. About five times the legal dues. In case you would like to verify, this is documented in that year’s annual report. Why? Because the leadership believed that though separation was inevitable, we owed them a better compensation; our workers’ hardship had to be mitigated to the extent possible. Our leadership felt that their responsibility towards workmen extends beyond what is defined by law. The response was ethical in the sense we made a choice of what was the right thing for us to do. When Mumbai had torrential rains on 26th July, 2005, dozens of families were distributing eatables, tea, and coffee to the stranded people. Mind you, they were not selling it. It is believed that in spite of being in a completely disorganized state, leadership rose in pockets everywhere in Mumbai to handle the crisis. Imagine a large number of people making the same decision: they felt they ought to be helping people in distress and not making money. Such incidents show the true character of the people. It was a correct ethical response to an unusual situation. This would not have been possible without a leadership at work, however invisible it may be. April | 2009 NHRD Network Journal

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COURAGE The fourth dimension is that of ‘courage.’ Aristotle believed that courage is the first of the human virtues because it makes the others possible. Script writers usually rely heavily on this aspect to create dramatic situations in films. Amitabh Bachchan perhaps symbolizes this best in films like Zanjeer. Jaya Bhaduri is an eyewitness to an accident in which school boys die, but refuses to identify the culprit. Remember the scene when an angry Amitabh drags her to the morgue, shows her dead bodies of those children and then tells her to go away? She turns up at the identification parade and identifies the criminal. It is not at all an uncommon tendency to run away from police. And it is also not at all an uncommon tendency on the part of police to give up. In spite of that, acts such as the one in the film happen in actual life too. Such acts like the one in the film happen because we believe that’s the right thing to do. We have to recognize that there are many situations in which we can turn the proverbial Nelson’s eye to events. It is such contrasting situations that make you understand that we are what we have chosen to be from the depth of our being. We are a product of our will. INFLUENCE A leader is constantly under watch by people with whom he works. They also notice the lack of coherence in knowing and doing. I would now like to talk about a leader’s ability to influence. Much has been written about charisma, about leader’s oratory skills. There are many writers who think that Mahatma Gandhi was neither a charismatic leader, nor a great orator. But his influence over people could not be called anything but exceptional. His influence came from his vision, ethics, courage and his authenticity. Today, the world is thinking in terms of ‘authenticity’. There is no better example of authenticity 120

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than Mahatma Gandhi. He did what he said. And he said what he thought. Complete congruence! The knowing-doing gap which is also described as the distinction between espoused and enacted values is what sets an authentic leader apart from those otherwise. Dr. Zakir Hussain, our former illustrious President was distributing prizes to school children when his peon rushed to him. The peon whispered to Dr. Zakir Hussain an urgent message. Dr Zakir Hussain’s daughter, perhaps of the age of the schoolgirls in front of him, was ailing and had just passed away. Dr. Zakir Hussain continued to give away presents till that job was done. ‘The children would have been disappointed if I were to walk away’ he said. Biographer of Dr. Hussain records that for several mornings thereafter the housekeeper used to discover very wet pillow covers. So this is what authenticity is all about. You accept yourself as you are. And you declare to the world what you are. And this requires self awareness. Awareness comes out of reflection; reflecting on one’s own experiences. If we want to be a good leader, we must develop this habit of reflection. This also means that you reflect on your roles. Each one of us plays multiple roles. With changing times and growing age these roles change. Think of our parents’ expectations from us when they are in their forties and we are in the teens. Think of their expectations from us when we are in our forties and they are in their seventies. This changing expectation is felt in our professional roles too. Thinking about our multiple roles makes us more effective in those roles. It helps us practise the values consistently in those roles. And that makes us authentic. Leadership is now being viewed as a process. This is not mechanical but it is very

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organic. And that is precisely the reason why coaching helps. Knowing oneself, constantly increasing self awareness, espousing and practising values, and moving courageously towards the goal are important steps in that process. But it is a bit like swimming. Knowing the steps is just not adequate, mastering the process is important. Nobody asked Naseema to work for the disabled, but she did. Nobody asked Chandrashekhar to transform the way Thane city looks, nobody asked him to repeat that splendid transformational performance in Nagpur. Nobody asked Dr. Madhav Chavan to return to India and launch the NGO ‘Pratham’ when he had everything going for him in USA.

Naseema, Chandrashekhar, and Chavan decided to take charge of their lives. They created for themselves a purpose to live. They held themselves accountable for making their dream come true. Nobody imposed it on them; it was their choice. Some people realised what they missed in life only when they had a near death experience. There are a number of stories of cancer patients or heart patients who discovered a purpose to live. We need not wait for a visit to the hospital to discover our purpose! Koestenbaum says it well. ‘Unless the distant goals of meaning, greatness and destiny are addressed, we can’t make an intelligent decision about what to do tomorrow morning’.

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LEADERSHIP - THE EXPERIENCE OF THOSE WE CHOOSE TO LEAD SATISH PRADHAN Abstract This article brings forth a critical analysis of leadership and the requirements of a leader. It begins by stating that some aspects of leadership are emerging while others are set in stone. The article outlines that a good leader must be honest, accountable and authentic. The leader must be a visionary but at the same time must have foresight and should not lead people by fear. Lastly, a leader is always expected to deliver. There is a thin line to tread for leaders and they must maintain the balance while walking the tightrope of business. About the Author Satish Pradhan is the Executive Vice-President, Group Human Resources of the Tata Group. Prior to this he was with ICI Plc. London. During the last 26 years, He has worked with SAIL, CMC, ICI India, Brooke Bond Lipton, in various capacities in HR areas. He is on the Board of Tata Institute of Social Sciences and member of the Technical Advisory Committee on HR of RBI.

Leadership has many facets and is probably the most written about subject. Equally, it is a subject on which we all have an opinion. Looking at aspects of leadership as I have experienced them over the years, and their relevance to the emerging times, has thrown up several interesting thoughts. Drawing on these observations of leaders and emerging leaders over the past years across geographies and businesses, I attempt to distil some insights for us to ponder. As we walk into the emerging realities that are taking shape around us there is a paradoxical sense of the enduring relevance of When leaders speak some of the people watch their feet characteristics of leadership and an emerging set of characteristics which seem to become increasingly more 122

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important then perhaps they have been hitherto. We judge ourselves by our intentions, but we judge others by their behaviour. Leadership is experienced and assessed by others through the behaviour of the leader. The only way our intent can be experienced by others is through our words, deeds and thoughts. Working on this premise, lets look at some of the behaviour that leaders demonstrate, which seem to be effective and powerful. “Authenticity”; “integrity of thought, word and action”, are expressions commonly encountered as requirements from leaders. The coherence, alignment, and authenticity between our thinking as we express it, the words we speak, and what we actually end up doing is stunningly clear to the outsider. The economic down turn triggered in the minds of many by the greedy and unscrupulous acts of “fat cat” leaders who

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pay themselves billions in salary and bonus, has lead to the loss of jobs and personal crisis of many people and is a backdrop in which this particular aspect assumes great centrality. The single most important requirement from leaders is candour. Being trustworthy demands that people Tall it like it is who follow can be confident that you will give them the truth. Almost like a minimum threshold requirement, this is also the most vulnerable aspect of leadership. The dilemmas that a leader faces in reflecting a realistic sense of the outside world to the organisation and creating hope and energy in engaging the organisation in difficult and challenging tasks, highlights this. The gloom in the outlook and search for a “bottom” from where the journey to recovery can begin makes this a challenge. This permeates through to giving candid and even-handed feedback both at business and personal levels. People want the leader to take ownership of and accountability for the agenda, the means, the Stand up and be counted choices and m o s t importantly the people. The need for experiencing “felt fair” and equitable leadership, living up to commitments are important. Leadership behaviour and holding oneself accountable especially in the “bad times” heightens the expectations here. People also want their leaders to support and bat for them when they are “right”. Keeping promises are as important as demanding promises and their delivery. When the Chairman of Tata Motors, Mr. Ratan Tata promises to give the world a small car at Rs. 1 lakh and keeps that promise, it is expected that he will do so! Behaviour like the statement made by him –“if you put a gun to my head, either move the gun or pull the trigger – because I will

not move my head” - and the actions to back that up – a willingness to pay a personal price for the super ordinate goal you urge others to follow has more effect than anything else. It is powerful when leaders demonstrate that the super ordinate cause which they are urging others to give their “all” to is something which they themselves are willing to give up some personal benefit for. This becomes evident and has an inspiring effect even in day-to-day matters, when for example, a cost cutting exercise is lead by the leader herself – taking a cut in perquisites or visible elements like economy class travel. People need to experience a cause which is larger than “you” on which you and they can hang their commitment and for which you are seen making some sacrifices at a personal level. People need the leaders to paint an exciting picture of the future but equally don’t want a complete gift wrapped package that they can’t add themselves too! There is a tight rope walk between the visualisation of the contours, coordinates and hues of an inspiring enough future and giving people the space to add their own mountains and rivers or even small Tell me a story that I can write myself in as one of flowers and blades of the heroes / heroines grass to the picture to create a powerful shared vision of a desirable future that has a compelling pull for the people. “I want to understand how I and what I do fits into the big picture”. “Think with me”; “include me in your thinking through this” are refrains one keeps hearing. When a fledgling Tata Company called CRL wanted to develop a super computer with a 120 teraflops rating which would make it the number 4 supercomputer in the world, an Irish friend of mine said “I wouldn’t start from here if you want to go there!” Leaders need to help April | 2009 NHRD Network Journal

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people suspend their “disbelief” and the sense of being overwhelmed by the constraints of the present to allow the potency of a powerful vision of the future to wash over their souls. This needs working through the journey to arrive at the vision together. A related dimension to visioning that we keep coming across is about being able to “see around corners”. Prescience and fore thought are experienced with great impact not merely in envisioning the future but in folding the future into the thinking for today. Framing issues and focus with a thoughtfulness and wisdom ensures that the people Framing the issue are persistent in pursuing the direction and drivers that build tomorrow while delivering today’s results. Judgement in the face of the unknown, given the increasing volatility and uncertainties that confront most of us, has become an even more critical need. The use of questions and enabling the people to work out for themselves the way forward rather than giving a solution, often leaves people with more. Making patterns – connecting apparently unconnected things to bring new insight along with the ability to amplify “weak signals” emerge as a winning combination. Bringing to bear both width of perspective and depth, detail and rigour build enduring and institutionalised approaches and processes as well as capability in people to handle complexity and the unknown more effectively. It is in this space the ability to manage innovation emerges as a great challenge of leadership, especially today. One of my colleagues describing a leader said “it is amazing how he can de-clutter a conversation or an issue! It is really very helpful” – the ability to simplify complex issues is how effective leadership can bring their width and sagacity to bear on a subject as well as meet the needs of the people. 124

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The heart of leadership is the heart of the people you lead. When Napoleon said “let them hate as long as they I matter fear” he stated the recipe for failure. Followers have choice – they can comply based on authority, hierarchy, fear, greed and so on; but they will “commit” to what they see as leadership. Grace and humility are muses to the gods of business smarts and thinking prowess. This becomes essential not only in dealing with people but in nurturing the strengths and developing the leaders herself. When dealing with people, giving “face” along with the credit and recognition when due are essential. People want to be reinforced when they do good things and built on that rather than be only upbraided for shortcomings. There is also a palpable need for help in doing their work when they need help. This is not to be confused with taking over their role, interference or micro management and if not watched can end up with other people’s work being done on your desk! People expect the leader to deliver. Whether it is the Katrina disaster management or the economic crisis or a business situation, leaders need to deliver. Demanding and setting high expectations and standards for Getting things done themselves and others, attending to issues with rigour and depth, demonstrating passion and zeal for quality of outcomes distinguish the ones who people want to respect and follow. Being tough with yourself is a precondition to credibly being tough with others. And believe me being tough is needed and will be needed even more in the future! The above is neither exhaustive nor comprehensive but a selection of aspects that seems to jump out as important in the light of the world we are in and walking into. As with many other things, what we

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are hearing from anecdotal and research studies that in leadership too – what is done and how it is done are both important. Neither is it acceptable to people that Who tells the emperor the leader is a that he has no clothes “ w a r m leadership? cuddly teddy bear” nor that she rides over the blood and bones of people towards a very laudable objective. The balance has to be calibrated from feedback and listening to voice of the customers of our leadership behaviour.

innovation with “ideation”. We confuse “popularity” with leadership; “telling people off” with candid and even-handed feedback; “nitpicking” with depth and detail; “check with me” or the other extreme of abdication with delegation. We could also be vulnerable to the fashion industry in the leadership business and get carried away by the latest “fashion” or fad because our peers or other are doing the same. We possibly do occasionally have a propensity to revert to our earlier roles and stop learning and re-inventing ourselves.

There is the flip side too – what doesn’t work too well. Many of us occasionally blur the distinction between the appearances and appurtenances of leadership with The Minefield leadership itself. We may find ourselves preoccupied with trying to appear to be “leaders” rather than actually being leaders. We, perhaps, at times mix up the leadership requirement to manage

While this is the potential minefield, most leaders recognise and build reality check mechanisms to avoid the traps of delusions of grandeur, megalomania and other such leadership pathologies – but then these are occupational hazards for those of us who chose to lead. At the end of the day there is only one rule – how you behave is the only tangible connecting mechanism between you and the people you lead and the way to hell is paved with good intentions.

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ALL ABOARD! - THE LEADERSHIP JOURNEY AT HAL SANJEEV SAHI Abstract Human capital is the tool through which strategy manifests itself in an organization. A dedicated workforce, fueled with energy can enable the organization to realize ambitious goals and climb the ladder of success. This article traces the leadership story of India's largest Defence Public Sector organization, which developed a comprehensive Leadership Capability Development model across the organization. The model served as a key enabler that channelized people energy in the right direction and led to enhanced growth in the organization. About the Author Sanjeev Sahi is Director, Human Resources and a member of the Board of Directors – HAL. He completed his Masters in Management Studies in Engineering and Technology from the prestigious Birla Institute of Technology and Science, Pilani (BITS) in 1977. Since then, he has gained extensive experience in leading Indian public sector undertakings such as steel major SAIL, power majors NTPC and NJPC, before joining HAL in 1995. In addition, he holds high level positions in the apex body of public sector undertakings in India Standing Conference of public enterprises - SCOPE. He leads HAL’s people strategy and has been driving leading-edge HR initiatives, with a focus on leadership development, improved productivity and global competitiveness.

If you observe the runway during a takeoff after sunset, you see the runway lights prominently at first and then as a rapidly moving blur of dots as the aircraft lifts off. Hindustan Aeronautics Limited (HAL), India’s largest defence public sector undertaking, is passing through this “rapid blur” as it takes off towards its destination. Having gained Navratna status in 2007, we have now set course to become a leading global aerospace organization. Ambitious? Certainly! This ambition is our fuel.

HAL has developed as an integrated aerospace organization and has spread its wings to cover various activities in the fields of avionics, design, development, manufacture and maintenance of advanced fighters, piston and jet engine trainers, helicopters and associated aero-engines. Opportunities of a burgeoning order book are complemented by vast experience in design, development and production, robust infrastructure, a culture of integrity and respect for people.

In the same way that the wheels, which enable the aircraft to move on the ground, are retracted during takeoff, HAL accords due recognition to capabilities which have taken us thus far on our sojourn since 1942

Time to strap on the G-Suit Four years ago, as we introspected on the destination at hand, there was total unanimity that reaching our destination

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will require a completely different orientation – in terms of structure aligned to manage soaring expectations, streamlined lean-based processes to steer our organization and above all, preparing our crew and passengers for a safe and smooth journey. An appropriately capable workforce, when provided with the right infrastructure, will be in a position to operate effectively and in a manner that will delight customers, hence creating profitable growth. We recognize that our challenge, as custodians of the people strategy at HAL, is to kick start and sustain this virtuous sequence, and unleash the power of our workforce. Concomitant with rapid ramp-up of our execution ability to deliver a mammoth order book, is the challenge of managing the growth imperative. We have recognized that while top-class execution is necessary, it is not a sufficient guarantee for long-term sustenance of an organization, especially with opening up of the defence sector in India and the phenomenal global opportunities across the entire value chain. Our people would need to make this journey, to reach our destination…but were we ready as an organization? How were we to proceed? We had a large pool of technically wellqualified personnel, but how were we to prepare them to lead our transformation? What would be the basis for the individual and hence organizational capability development? These were the burning questions for which we needed to find answers quickly. The Board of Directors and the Chairman deliberated on the need to embrace the leadership agenda and reached a consensus that a robust model of leadership development was required, to ensure sustainable progress towards our organizational goals. HAL as an organization with nine R&D Centers was always willing to experiment. We turned to Ernst & Young’s Human Capital

Practice, our advisors through the conceptualization and implementation of this journey. Our Calibrated Leadership Gauge The pieces of the jigsaw puzzle confronting us slowly began to fall in place, with competency-based people strategy emerging as a foundation. Our first significant step in this journey was the development of a leadership competency model - a homogeneous blend of our vision, SWOT, success stories within HAL and relevant inputs from the best in class organizational competency frameworks. Our competency framework focused on three broad themes: a. Building business b. Getting results c. Organizational development

and

individual

The Leadership Competency Model serves as a standard for definition/identification of leadership potential and a common language for communication of leadership expectations at HAL – irrespective of the function, level or location that our people are part of. At the role level, we focused on improving clarity through development of structured job descriptions and competency profiles, across all our divisions and departments. The Flight Announcement - Loud and Clear The Chairman was convinced about the efficacy of competencies and ratified a very significant decision – Utilizing leadership competency proficiency in promotion decisions. The emphasis, however, was clearly on individual-led organizational capability development. This bold decision generated significant interest in the organization about competencies and how the proficiency was to be ascertained. By this time, we had a structured assessment April | 2009 NHRD Network Journal

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HAL Vision & Mission Business strategy

Future Capabilities; Market Place & Competition

Key Success factors

Best Practices

Leadership Competency Model

Competency Based People Strategy Recruitment and Selection

Performance Management

Training and Development

Reward Management

Career Management & Succession Planning

Leadership Capability Development

BUSINESS RESULTS

mechanism in place, for competency mapping. The Leadership Altimeter Over a three-year period, we have conducted assessment centres (AC) for more than 800 officers across middle and senior-level officers and another structured process for junior officers. As part of the AC, each participant received individual feedback, structured written reports summarizing the demonstrated proficiency levels of the candidate and personalized individual development plans. Results of the AC were analysed

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across competencies, levels and locations through an e-enabled dashboard. All participants were mapped into a nine-block performance-potential matrix through the dashboard. We also initiated an e-enabled 360-degree feedback to obtain multi stakeholder inputs for development. These initiatives have provided us with specific information on competencies, which require focused development, and the extent of gap – both at an individual level and an organizational level. Our team has been renamed from Personnel and Administration (P&A) to Human Resources (HR). This is a strong

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indicator of our conviction that our emphasis needed to be on strategic contribution to HAL’s transformation and no longer remain pre-occupied with administrative tasks. Breaking the (Static) Barrier Running and communicating this initiative in an organization with HAL’s level of complexity and legacy-based elements has been a mammoth task. It required solid support from the Chairman and other colleagues on the Board, improved awareness of our HR team and extensive communication at an organizational level. The challenges have been around generating buy-in, managing apprehensions and sustaining momentum. We anticipated this and made transparent communication a mantra. The Chairman directly communicated with all employees at HAL regarding the development initiatives being undertaken in the organization. Internal assessor training workshops were conducted for the HR team at HAL to increase awareness of the entire transformation taking place and to ensure that the HR team is conceptually clear and adept in communicating the results of this initiative. In order to ensure the success of the development initiatives and garner support for the same, we used a combination of formal and informal mechanisms to communicate our Competency Based Leadership Development Program. Senior functionaries from HR travelled extensively to various locations of HAL and used all possible forums to highlight the importance of the need to bring about this change. We ensured our presence in each AC. We had “ice-breaker” discussions with all participants, to set the expectations at the beginning, and detailed feedback at the end of the centre. Transparency and openness were maintained while conveying reports to the participants.

Managing Turbulence Despite our efforts, we have had our fair share of challenges. Communication of leadership expectations to a predominantly technical workforce involved a mix of conceptual education and breakdown of skepticism. Large competency gaps were identified through the ACs, which reinforced the urgent need to undertake development initiatives. The important difference between performance and potential needed to be conveyed and reinforced, as there was an implicit assumption that high performers and high potentials were the same. When highperformers were presented with data on competency gaps, there were challenges in convincing them about the implications of the same and associated development imperatives. Step Climb Having reached thus far, we now realized that now the lateral journey had just begun. We had a good grasp of the competency gaps and development needs. We also had certain development initiatives in place, with more being launched. There is now a case to stitch all these efforts together into a comprehensive program, which would cater to the leadership imperatives of HAL. This is when we conceived an organization wide Leadership Capability Development Program. This is our attempt to align talent management, career management and succession planning. We envisage that this program will help us fill the vacuum created due to superannuating critical resources and prepare a leadership pipeline to deploy a program-based strategy and improve the overall organization capability index. We will employ a requisite blend of experience, feedback and education-based initiatives such as coaching, action learning, mentoring, shadowing and targeted development initiatives in association with April | 2009 NHRD Network Journal

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leading management institutions such as the Indian Institute of Management. We intend that line managers don the mantle of leading this program for their teams and chalk out development plans for themselves and their subordinates. Further testimony of our commitment to leadership development is our decision to revise our existing functional organization structure and align it to leadership tiers ranging from visionary to operational. I strongly believe that leaders exist at all levels.

Our competency-based leadership capability development program will be the focal point of our HR initiatives in the future. While we have made significant investments in strengthening our people strategy over the last 3-4 years, we realize that our leadership journey has just begun. We are also upgrading our infrastructure through a state-of-the-art Management Academy, which will serve as our in-house leadership development playground.

Stretch Goals

Programme-specific Learning

Competency-based Learning

Action Learning Projects

Leadership Capability Development

Mentoring

Coaching

Job Rotation

Shadowing

We also see our Leadership Capability Development Program as a vital instrument to transforming our culture; it will enable delegation of responsibilities to lower levels, breakdown of silos, optimal utilization of specialists and generalists and make us agile as an organization. HAL’s complex stakeholder map and the impact of every individual’s action mandate a need to rise above the crass material considerations, which guide the average transactional relationship between employer and employee. “Yogah Karmasu Kaushalam” [1] is a message that I intend to drive across this program. This simply translates to “Yoga is skill in action”, a 130

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corollary of Karma Yoga’s essence – Duty for Duty’s Sake. Under Mighty Wings – The Power of One Like any organization, we have our constraints, but to reach our journey, we will focus on the positives, while consciously eliminating any stall. I am reminded of Helen Keller’s famous words[2] – “Keep your face to the sunshine and you will not see a shadow”. We recognize the need to be patient, as individual development is about assimilation and introspection. Our journey will have its pockets of turbulence and we are open to dynamic course correction.

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This following short story conveys the impact that the positive attitude of individuals can have in changing mindsets and leading transformation. Three stone-cutters were engaged in erecting a temple. “What are you doing?” was the common question posed to all three. Their responses have a simple, yet profound message: “I am a poor man. I have to maintain my family. I am making a living here,” said the first stonecutter with a morose face. “I work because I want to show that I am the best stone-cutter in the country,” said the second one with a sense of pride.

“I want to build the most beautiful temple in the country,” said the third one with a visionary gleam. Their jobs were identical but their perspectives were different. This visionary perspective among our workforce will make HAL a temple of modern India[3]. Individuals who are possessed with this visionary zeal and energized by the prospect of their own holistic development will be nurtured by HAL’s emphasis on leadership capability development. This will lead to the creation of a critical mass of leaders who will supercharge their teams and ensure safe, smooth and timely landing at our destination.

Notes:

(1) - Derived from the Bhagavad Geeta (The Song Divine) – Chapter 2, Verse 50 (2)

- Attributed to Helen Keller, inscription in autograph album of Lafayette E. Cornwell, Yonkers, New York.—Walter Fogg, One

Thousand Sayings of History, p. 17 (1929) (3) - India’s first Prime Minister, Pt. Jawaharlal Nehru, while dedicating the Bhakra Nangal multi-purpose project to India on October 22, 1963, termed these large projects “temples of modern India”.

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THE NEW LEADER AN EMERGING BUTTERFLY T.T. SRINATH Abstract Modern day organizations are complex entities that are ever evolving. Therefore, managing them successfully calls for 'extraordinary ingenuity' and requires investment of immense 'human energy'. In such a system, leaders play a critical role and exercise great influence on the organization's environment. This article presents a leadership framework and explains the key behaviors that efficient leaders already do or need to exhibit. About the Author T.T. Srinath Ph.D., is a sensitivity trainer who uses ‘T’ Group processes. He has undergone intensive Gestalt Therapy Training supervised by Steve Vinay Gunther, Director, The Northern Rivers Gestalt Institute, Lismore, Australia. He is a certificate holder in ‘Playback Theatre’ from Action Methods, England, accredited school of Playback Theatre. He has been trained by Francis Batten and Ron Wiener, both senior trainers with the British Psychodrama Association, in Sociodrama and Action Methods. He has trained with Jenny Biancardi and John Casson, both of The Northern School of Psychodrama, Glasgow, UK, in Psychodrama. He is an alumnus of XLRI one of India’s foremost schools of management and has spent 27 years as an entrepreneur and over 16 years as a programme facilitator. As winds of change sweep the world, leadership must awake and rise. The clarion call is to take charge. Organizations today can be defined as a ‘complex, adaptive, symbiotic systems’ (Olson, 2001). Their functioning, therefore, requires ‘self-organizing.’ A complex adaptive system renders visible, legitimate and significantly a great deal more live human behaviour than old bureaucratic structures allowed. It is an entity that is constantly changing. It evolves, adapts, develops and exhibits extraordinary ingenuity in the process. All kinds of forms of human energy that are invisible and often taboo in older structures present themselves and are available for continued engagement. 132

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Given this truth, three principles need to be recognized: 1. Order is emergent as opposed to predetermined 2. The system’s history is irreversible 3. The system’s future is often unpredictable. Leaders in such a self-organizing system play three distinct roles: 1. They set the container 2. Focus on significant differences 3. Foster transforming exchanges. Setting the container means influencing the environment that shapes the behaviour of a system. Leaders must set general requirements for the outcome, but

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decisions on how to proceed are left to the players of the organization. Control is distributed, yet leaders generate a sense of urgency. They stretch boundaries; they also shrink boundaries and finally decide on what business we are in. When focusing on differences they explore contradictions, accept contention and adversity, raise tough questions, encourage workforce diversity and understand significant differences in the external environment. In fostering transformational exchanges they encourage feedback, reconfigure (loosen or tighten) networks and encourage learning. A model of leadership demonstration presents itself for consideration: 4C Model Leadership Demonstraton 4C Model of ofLeadership Demonstration

Clarity intent Clarity of of Intent

Context Act Contextto Act

Courage to Courage to Demonstrate

Container to Practice Container to Practice

Demonstrate

Intention has been conceptualized as being a function of beliefs that provide a link between thought and subsequent behaviour (Fishbein and Ajzen, 1975). Bird’s (1988) model of entrepreneurial intentionality illustrates intention as a linear process moving from beliefs, to attitudes to intention to behaviour. The relationship between intention and behaviour is also influenced by such factors as skill, ability and will-power. The free disposition to play a leadership role is impacted by contextual factors. It is a combination of these factors, affected, as

they are by the internal dialogue that encourages an understanding of the leadership role. Intention thus reflects the leader’s willingness to pursue a given behaviour. Significantly, when Walt Disney made vocal his intent to provide his clients with a ‘Fun experience’, he programmed himself to demonstrate such behaviour. The display of intent is governed by the leader’s personal history, abilities, stored information, belief and selfdialogue. Thus the leader in response to his/her intent establishes the context within which his/her people can act. This can be explained through the examples of luminaries such as Azim Premji who moved from vegetable oil making to Information Technology, setting clearly the context for his people to act. When Dhirubhai Ambani declared to the world that he wanted a telephone call to be cheaper than a post-card, he set the context for a new business. Therefore a leader sets the context in which his/her followers can act. Mere context setting does not allow leadership demonstration. This is followed by the leader’s courage to demonstrate risk taking, seizing opportunities and showing initiative. Leaders do this in many ways. Some are: 1. 2. 3. 4. 5.

Through structuring resources Maintaining flexible focus Develop temporal agility Behavioural flexibility Influence others to commit to resources.

a. Through structuring resources: This is linking existing resources such as money, invention and hard work to future outcomes. The leader exercises choice in directing the organization’s efforts. Structuring resources is also affected by timing of events and this timetable involves expectations, April | 2009 NHRD Network Journal

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business plans and motivations of the leader. b. Maintaining flexible focus: Flexibility of focus and clarity of vision helps the leader assume responsibility for the details of daily operation as well as the big picture. The ability to move between details and vision is like a strategic zoom lens, remaining focused by changing the frame of reference. c. Develop temporal agility: The ability to comfortably move between multiple future time horizons. Long-run thinking is important to forming relationships with others and to strategically position the firm. Agility requires a cognitive reframing of expectations when solving problems. d. Behavioural flexibility: Developing behavioural flexibility along with the shifting frames of reference requires the leader to be able to shift from function to function and from role to role. Leaders who remain in control of their ventures as they grow, mature, and change go through significant role transitions. Behavioral flexibility and willingness to learn characterize those leaders whose firms are likely to remain and grow. e. Influence others to commit resources: Leaders must exercise substantial influence over others to realize their intentions. Leaders must marshal facts, analyze data in support of their efforts and use persuasion to influence others. Successful leaders draw on nontraditional emotional resources to influence the behaviour of others. Leaders must make use of wide range of other’s resources and talents to develop exchange-oriented relationships both inside and outside the organization. Inside the organization growth motivated leaders build a team with necessary skills. 134

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Outside the organization they develop and use a network of associations. The use of experience, observation, dialogue, discussion and feedback are methods that can help a leader in examining structuring resources, maintaining flexible focus on business issues, developing temporal agility, developing behavioural agility and influencing others to commit resources. Clarity of intent, context to act, courage to demonstrate cannot happen without boundary definition. Thus setting the boundary or the container becomes paramount. The recent example of ‘Aravind Eye Care System’, India, where Dr.G.Venkataswamy established unequivocally, that he wanted to eradicate blindness, set the boundary for every ophthalmologist who joined the hospital, to operate within. It was not a hospital for general surgery but for eye care. While leadership can be a lonely journey the challenge is for leadership to foster the belief, particularly at a time like this that the people we have are the best. Seeding excitement, commitment, ownership and motivation are required to urge the business forward without compromise or conflict. If thoughts such as these are available to a leader’s instinct he/she must, given his/ her clarity of intent, operate through five simple principles (Cooperrider, DL 1990): 1. The constructive principle: recognise that all reality is co-created. 2. The poetic principle: recognise that each person interprets reality one’s own way and that must be factored in. 3. The anticipatory principle: recognise what is going right than what is going wrong. 4. The simultaneity principle: recognise that all processes happen concurrently.

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5. The heliotropic principle: recognise that all human endeavours are towards growth.

3. The organization is learning and is therefore in infancy, and needs constant nourishment

These five principles coupled with clarity of intent, context to act, courage to demonstrate and container to practice when recognized, act as the new leader’s dictate; the philosophy to embrace then is:

4. Core values do not alter with time

1. Emphasize collaboration and participation of all voices in the system; generating inclusion 2. Approach the whole process as a journey

5. Build on life-giving forces by remembering moments when the system has performed optimally in human, economic and organizational terms. If the model that has been presented and the approach resonate with you ‘intelligent reader’, please commence a dialogue for health restoration in your role as leader.

Reference •

Bird B. (1988), ‘Implementing Entrepreneurial Ideas: The case for intention’ Academy of Management Review, Vol.13, No.3, pp.442 - 453.

1.

Cooperrider, DL (1990), ‘Positive Image, Positive Action: The affirmative basis of organizing’, in S.Srivastva & DL Cooperrider [Eds], ‘Appreciative management and leadership’, San Francisco, Jossey-Bass.

•

Fishbein M. and Ajzen I. (1975), ‘Belief, attitude, intention and behaviour: An introduction to theory and research’, Reading, MA: Addison-Wesley.

•

Olson, Edwin.E and Eoyang Glenda H (2001), ‘Facilitating organizational change: lessons from complexity science’, JosseyBass/Pfeiffer, San Francisco, CA.

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LEADERSHIP AT BHARTI INDER WALIA Abstract Individuals make groups and groups make organizations. As elaborated in the given article, leadership is about energizing and developing all the categories as they are intrinsically bound together. The article explains leadership philosophy and the various leadership development activities undertaken in one of India's youngest and fastest growing organization - Bharti. The article also illustrates that leadership is not just about increasing the revenues/profits but about passion and making the right decisions. About the Author Inder Walia joined Bharti Enterprises Ltd in August 2007 as Group Director- Human Resources and Integration of Bharti Group. He is also a member of the Bharti Management Board. Prior to joining Bharti Enterprises, Inder was the Executive Vice President- Human Resources and a member of the Group Management Committee of ArcelorMittal for over 8 years, where he was responsible for Groupwide HR and post-merger Integration. Prior to working with ArcelorMittal, Inder was with Modi Corp/Modi Xerox and HCL Hewlett Packard Ltd. Inder is an Economics and Accounting graduate with Post Graduate Degree in HR from TISS, Mumbai. Something ignited in my soul, Fever or unremembered wings And I went my own way, Deciphering that burning fire. — Pablo Neruda Very often do we find ourselves thinking about what a leader does that makes him/ her stand out. How is it that some people become leaders doing the same things as what their colleagues do? An individual with a few years of experience and doing fairly well in his job decides to take a risk and joins a company all of 3 years old; a company trying hard to make an identity for itself; a company in search of professionals who would work for passion and not for money. He joined as the head of a state level business and was given the task of taking the business to 136

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leadership - a big ask. While the company was actively involved in growing big, he worked passionately leading his team to do the job assigned. Impressed, the company decided to make him the head of an entire region. For sure, the success bug had bit him. He led the region to dizzying heights of achievement in a short span of time proving his mettle yet again. The company realizing his potential well in time provided the right inputs to him. Within 5 years of him joining, he had reached the senior management at the company. What happened thereon was almost predictable. He hit the right keys each time and was given the right insights. Soon enough he ended up being a part of the leadership team of the group which had by now had grown to enormous’ proportions. He and the group fed of each others success. Both are leaders.

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This is just one of many success stories at Bharti. He is just one of the many leaders at Bharti. The group has grown and derives its strength from such leaders. While at the helm of affairs is a transformational leader in Sunil Bharti Mittal, it ought be pointed that the group has been successful in making a leader out of a many an individuals – many of whom are still with the group while some others who have gone ahead and made successes elsewhere. It is also essential to point that this was made possible only because of the authenticity and the drive to do better that Bharti demands not only from its leaders but from each of its employee. It is the attribute of a real leader to lead authentically with conviction. • Conviction of Purpose – It is essential to know the purpose of leadership for without a sense of purpose, leadership would be at the mercy of its ego and vulnerable to narcissistic impulses. At Bharti, the group shares a common vision and the purpose of leadership is to provide able guidance to achieve the vision • Conviction in Values – Values define leaders and are the real moral compass. They lead you in the right direction. As a leader it is essential to know the “real direction” you want to be headed in. While values are often shaped by personal beliefs, Bharti strongly believes in certain core values. Often, the stepping stone for success for many has been a matching of these with their own values • Conviction of Heart – Leaders need to have an ability to ignite the souls of their followers to achieve greatness far beyond. Bharti believes in engaging the hearts of the employees through the sense of purpose and shared values and that is what it expects from its leaders

too. Their positive energy often convinces the employees that their work has a deeper purpose • Conviction in Building Relationships – The mark of a real leader is his ability to develop close and enduring relationships. Bharti lives this statement and has inculcated this in its leaders and employees alike. Be it relationships with vendors, business partners or maybe just with colleagues. Bharti believes in building collaborative long lasting relationships • Conviction through Self-disciplineSelf-discipline is the most essential ingredient in making a successful leader. It helps in gaining respect. While a leader may have the values, the heart and the relationships, it is most important to ensure that he/she has the discipline to convert them into consistent action. This distinguishes the good leaders from the great one’s. This value is most evident in Sunil Bharti Mittal, Chairman and Group CEO. While the leaders at Bharti have been competitive always, it is to be always expected that they do that through a clear sense of purpose, values and discipline. Leadership Philosophy at Bharti “Leadership is what the leader does” That’s the philosophy at the Bharti group. Never to be constrained in the boundaries or realms of what has been done but to take the path never taken and to make a success out of it. Bharti has always focused on transformational changes that have a positive impact all around. The group has demonstrated this philosophy by leading India’s telecom success story, with entrepreneurial spirit, innovation, and strong partnerships being the pillars of growth. Not limiting to the domain of telecom – the area of expertise, April | 2009 NHRD Network Journal

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Bharti set out to gain leadership in new businesses in agriculture, financial services, real estate and retail. The group has laid the foundations to be the best conglomerate of future. Sunil was always driven by building something grand. He still is…and so is Bharti! “A lot of people confuse what we have built so far as a great edifice. My personal belief is that what we have built so far are the foundations on which to build a truly great edifice.” says the achiever himself. The brand essence “Big Transformations, brave actions” is indicative of the pervasive thinking in the group. The actions and drive to achieve has lead it to leadership. Bharti already has a world class telecom business (in Bharti Airtel), which is respected for what it has achieved in the short span of time. The group now aims at building transformational businesses which would be the future growth engines. This is indicative of the leadership trait of never resting on one’s laurels. The new brand logo of the group also reflects the desire to seek and lead new avenues to grow. It signifies depth, bountiful energy and movement that extends beyond boundaries through swiftness, precision and accuracy – something which has led the group to where it is today and something which will lead it to achieving the shared vision. As per Sunil, “The ecosystem that we have developed around us is so positive and enabling that it has the potential to become a global benchmark.” DNA of a Bharti Leader There is a strong belief at Bharti that it is essential that people feel empowered. There is huge impetus around making people aware of their qualities and making them responsible to nurture and build those qualities. Empowerment is expected to be taken through display of skills and competencies. Sunil recalls that when the company was rather new, very few people actually came forward to join him. But out 138

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of those who did, very few left. “Empowerment was very high, to the point where people felt like owners; like it was their business. Being a part of that whole passionate machine was what kept them with the company.” This has been in the DNA of the company. An overriding feeling in whatever the group does is being flexible to adapt to changing environment and the evolving needs. There is a constant challenging of the status quo and continuous emphasis on innovation and energized new ideas with strong passion and an entrepreneurial spirit. Bharti loves to make it happen. Each Bhartian is expected to have an innate desire to do good being open and transparent all the time. And finally, it has and will always be about creating a positive impact in whichever field we operate in. This is what we believe is the DNA of a leader at Bharti. While these values propel an individual towards leadership, it the Bharti culture which builds the character of a true leader – Always being nimble footed when it comes to decision making, always taking everyone along while making strong formal and informal relationships, being accountable for what you do and above all always acting like an entrepreneur while thinking like a professional. Sunil talks about this often. He says, “Today the company has grown and moved from being an entrepreneurially led and entrepreneurially driven (EE) to being professionally led and entrepreneurially supported (PE). Today we are flexible and responsive and if some fire gets lit we can feed it or extinguish it fast. That’s the advantage we have.” While there are definitely those innate qualities which set apart the great leaders from the all so ran, yet it is often the case that an individual might be unaware of those qualities. Here is where the organization comes into picture

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Empowering People

Achieve ‘ProfessionalEntrepreneur’ (P.E.) Balance

Making it Happen

Empowerment with accountability at all levels

Openness & Transparency

DNA of a Leader at Bharti

Retain the nimblefootedness

Building strong format / informal relationships at work

Being Flexible

Leadership Development at Bharti The Leadership Development approach at Bharti is committed to delivering our business focus of building a best in class leadership team that nurtures talent & leadership at every level. The purpose is simple – to keep the leadership pipeline alive and buzzing all the time. Bharti believes in nurturing talent across levels with disproportionate investment on our top talent. The group prospers from its presence in the diverse industries to give adequate opportunities for individuals to grow. Individuals are encouraged to take on cross industry, cross functional roles across regions for their overall growth. Additionally, Bharti has leadership development programs for each level which aim at building a leadership pipeline to meet the future challenges. Developing the capability of our managers to blossom into leaders of tomorrow is the primary thought behind all the external inputs that Bharti provides. For the senior

Creating a Positive Impact

management, there are training program offerings from the best-in-class institutes e.g. partnerships with institutes like CCL & INSEAD where we have created customized programs to deliver trainings based on our requirement. For the Middle & Junior Management, the group has developed programs with premier Bschools for building general management skills in our high potential managers and developing competencies. Additionally, elearning has been used very effectively in giving the right direction to individuals. There is huge emphasis given on the employees making and sharing their self development program (SDP) each year. This ensures that there is incremental growth in terms of capabilities as per the expectations of the individuals as well as that of the organization. Focused development of High Potential Employees across Levels At each level, Bharti has key development areas identified which focus on individual leadership, leading teams as well as on driving business growth. April | 2009 NHRD Network Journal

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LDP (CCL) Senior Management

Leadership in Action (INSEAD) Future Business Leaders Program (ISB)

Middle Management

Emerging Leader Program (CCL) Business Manager Program (IIMs)

Junior Management Integrated high Potential Program Young Leaders Program

If Bharti has to go global, it would be essential to have the right leadership on board. Almost 30- 35% leaders at the apex level are either expats or Indians who have considerable experience working across countries. The seasoned hands will help in handling the complexity of business not only in India but also in global market, whenever the opportunity arrives. “Bharti’s principle to proactively look at future has helped the company improve on productivity and efficiency. The company is no longer dependant on a single person as we have managed to build a leadership pipeline.” Says Bharti Airtel CEO and JMD Manoj Kohli. Conclusion The Deputy Group CEO & Managing Director for Bharti, Akhil Gupta, puts the true meaning of a leader in perspective. “A true leader to us (Bharti) is one who leads and encourages transformational changes which others may either not have the authority or the courage to do on their own.” says Akhil. 140

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Bharti believes that a leader should be able to provide strategic direction by encouraging all experts in demystifying complexities of all aspects of business and making them so simple that the entire team understands them. Akhil further states that the true mark of a leader is that, “He/She is always ready to take the blame for failures or not so successful initiatives and liberally passes on the credit to others – individually and collectively and spreads positive energy with every action and speech.” This applies to all industries and irrespective of the scale and level of maturity. Bharti has reached where it has through sheer hard work, passion, far sighted strategy, sound execution, ability to innovate constantly and strong leadership. The success of a leader goes way beyond revenues, profits and bottom lines. A leader is about providing sound governance, igniting the hearts of the employees and building a succession line for years to come.

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Leadership is about passion, making the right decisions for the common good, taking everyone along on a journey and making a success out of it. It is about challenging the status quo and improving each time. Bharti, through its culture, values and its DNA, ensures that the environment and the ingredients are right. It’s just a matter of how one uses this to make an authentic leader out of oneself.

Peter Drucker said about leadership, “Leadership is not magnetic personality— that can just as well be a glib tongue. It is not “making friends and influencing people”—that is flattery. Leadership is lifting a person’s vision to higher sights, the raising of a person’s performance to a higher standard, the building of a personality beyond its normal limitations.”

Acknowledgements Our profound thanks to all the contributors of articles and book reviewers who have taken time off from their schedules out of their passion for the field. We would also to thank Mr. N.S. Rajan, guest editor for this issue for his dedicated contribution at every stage in bringing out this issue. Our special thanks to Amrita Vijay Kumar, E&Y for her tireless contribution and also to Komal Jalan and Akshay Chadha, E&Y for their help. Our thanks to Rachel Tharian for her support. — Editorial Board

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BOOK REVIEWS 1. LEADERSHIP BRAND (Developing customer-focused leaders to drive performance and building lasting value) Author : Dave Ulrich & Norm Smallwood Published by : Harvard Business School Press (2007), Price : USD 29.95, ISBN-13 : 978-1-4221-1030-0. HR guru Dave Ulrich and his colleague at RBL group, Norm Smallwood, have come out with yet another unputdownable masterpiece titled “Leadership Brand” in 2007. It is an absolute intellectual delight and treat for institution builders in general and more particularly for those interested in the field of Human Resources and Leadership Development. This book is a true treasure for many reasons. Firstly, it takes the evolution of leadership to a different and higher orbit; secondly, it provides a very compelling framework for organizations to elevate leadership focus to making it an organizational capability; thirdly the approach authors have taken represents a refreshingly outside-in perspective as opposed to the traditional approach to leadership frameworks that has, for decades, been inside-out; and fourthly, the authors have given a very systematic approach to building a leadership brand rather than merely conceptualizing the need for the brand. In introducing the book through its preface, the authors make many powerful observations. While reinforcing that leadership matters, they clarify the need for shifting the focus from studying leaders to studying leadership. “Good leaders just do not build their personal credibility, but build leadership capability or the capacity of the organization to sustain future leaders” say the authors. Building such a capability then represents an invaluable investor intangible for the organization and thereby they build lasting value for the organization. Simply defined, leadership brand is the identity of the firm in the mind of the customers made real to employees because of customer-centric leadership behaviours. A leadership brand translates customer expectations into employee behaviours and that outlasts the individual leaders! Leadership brand also represents a higher orbit in the domain of our understanding about leadership. Ulrich and Smallwood highlight that the focus of most organizations so far has been one or more of the following: • Individual leaders exposed to external environment as brands by themselves. They are the external face of the organizations and appear often on the front cover of business magazines. This is often understood as the case of “celebrity leaders” • Individual leaders are identified and groomed internally to become more competent often with a help of a well-defined competency framework. This produces a situation of “competent leaders.” • Organizations also shift the focus from individuals (leaders) to capability (leadership) by building internal systems and processes for creating a leadership engine. This delivers what may be called as “leadership capability” But lasting value is built for the organization only when there is an “orbit change” and organizations move the focus to capability and external customers and investors. This delivers an organizational identity of leaders throughout the organization that bridges customer expectations and turns these 142

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into employee and organizational behavior. This is when “leadership brand” is produced. Like product brands and firm brands, leadership brands, when accomplished, provide lasting competitive advantage for the organization. Authors explain this in the very first chapter with the examples of Canadian Tire company, Bon Secours Health Systems Inc. and Drugstore.com. Authors also provide a six step process for building a leadership brand. These steps in brief are: 1. Build a case for leadership brand 2. Create a leadership brand statement 3. Assess leaders against the brand 4. Invest in leadership brand 5. Measure leadership brand investment; and 6. Build leadership brand awareness to key stakeholders. In chapters 2 through 7, authors detail out the foregoing steps and provide key insights and ideas on how to accomplish each of these steps with several examples. For example, chapter two helps in linking the leadership brand to business strategy through 6 compelling reasons such as workforce planning, achieving right results the right way, strategy shits, geographic expansion, delivering both organic and inorganic (M &A) growth and finally matching high-potential leaders with critical jobs in the organization. Likewise, chapter 5 clarifies how to go about making investments in leadership brand. The key messages here include: branded leadership investments recognize that not all leaders are equal; these investments are personalized; they form an integrated system and are not isolated events and finally these investments are tied to the business. Throughout the book, the authors provide illuminating examples and checklists for measuring progress. Chapter 8 is focused on preserving the hard-created leadership brand, while chapter 9 provides excellent guidance on creating a personal leadership brand statement. The book concludes with two appendices. First one helps with brand criteria for product and firm brands as well as the leadership brand. The second appendix throws light on how to spot firms with leadership brand analyzing the examples of GE and McKinsey. I call this book as “unputdownable” because of the very fresh and impressively different perspective to building leadership capability that Ulrich and Smallwood offer in terms of leadership brand. The future competitiveness for the firms will move far beyond their product brand or firm brand to yet another intangible called the leadership brand. In my professional experience watching how corporations approach leadership, I distinctly notice a spectrum with the far extremes characterized by two major camps: First ones (and arguably better) talk about their “building leadership” with systems and processes; and the second ones brag about their “leadership building.” Most of the firms are of course somewhere in between. And that is the reason why I consider the “leadership brand” as a master craftsmanship by Dave Ulrich and Norm Smallwood. I recommend this book for organizational leaders and HR professionals as the wisdom offered in this book together with the roadmap gives them a lifetime opportunity to create lasting value and game-changing competitive advantage.

Reviewed by C.Mahalingam (Mali). Mali is currently the Executive Vice Presisent and Global Chief People Officer for Symphony Services Corporation. He can be reached at [email protected] April | 2009 NHRD Network Journal

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2. BOOK APPRECIATION LEADERSHIP IN THE ERA OF ECONOMIC UNCERTAINTY The New Rules for Getting the Right Things Done in Difficult Times Tata McGraw-Hill Rs.300 Ram Charan, a thinker and coach, who lives out of a suitcase, travelling from country to country and across continents offering his message to leadership, has captured succinctly and meaningfully the role of a leader, particularly a business leader in these times of economic uncertainty and turbulence. Ram Charan is a noted expert on business strategy and has helped businesses and leaders steer through the minefield of business problems. In his latest book ‘Leadership in the Era of Economic Uncertainty’ , he offers several lessons to cope with the current scenario. The book is presented in 9 chapters as follows :

INTRODUCTION-CORPORATE CRISIS! CHAPTER 1 THE CHALLENGE OF MANAGING IN A TOXIC ENVIRONMENT CHAPTER 2 AT THE HELM:What CEOs and Business Unit and Country Managers Must Do CHAPTER 3 ON THE FRONT LINES:Sales and Marketing CHAPTER 4 MIND OVER MONEY:The Chief Financial Officer CHAPTER 5 MAKING IT ALL WORK:Operations CHAPTER 6 REFOCUSING INNOVATION:Research and Development CHAPTER 7 TYING IT ALL TOGETHER:The Supply Chain CHAPTER 8 SUPPORTING THE TEAM:Staff Functions CHAPTER 9 THE VIEW FROM THE TOP:The Board of Directors MOVING FORWARD While the book has specific messages for CEOs, COOs, CFOs, CTOs, it also has messages for every business leader who aspires to make a difference. Briefly his messages are as follows: 1.

Leadership must recognise that only by synchronising people as a companywide team, can we obtain ‘focus, speed, urgency and flexibility’ making and executing decisions faster

2.

Leadership derives its authority not from omniscience but from its ability to facilitate understanding

3.

Inspiration comes from incremental successes. These are high energisers that build further success. Leaders must therefore celebrate small successes

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While a realistic assessment is required to understand and accept the magnitude of a problem, the fact is that few problems are insoluble. Leaders must focus their people on the vision of what is possible

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It will take imagination and guts to place strategic bets with no guaranteed payoffs when there is little money available and so much uncertainty about the assumption a plan is based on. Yet such bets are critical. Leaders must invest with faith

6.

Questions leadership will be asked by subordinates are: i. ‘Are we going to make it?’ ii. ‘What do I have to do?’ Leadership has to provide reassurance as well as guidance to everyone in the company. 144

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7.

The leader’s job is one of leadership and operations. The first is about inspiring and motivating people to go beyond their fears and painting a believable future that is waiting after the storm. The second is about the daily nitty-gritty of doing business successfully in a very tough and unpredictable environment.

8.

The leader’s actions have to be bold, not tentative, if we have to convey confidence.

9.

Leadership must identify the constituents and things that are at the core of their company and protect them from loss or damage during the crisis.

10. This is a time that requires superb horizontal cooperation among people. Leaders must encourage cross-pollination. 11. Leaders have two major responsibilities that must be met through communication: information flow and motivation. It is essential to repeat it time and again to be sure everyone gets it. The need is for leadership to have clarity of intent, create context for people to act, demonstrate courage of conviction and establish the container or boundary within which people can practice. S.SADASIVAN Research Associate, Dr. T.T. Srinath & Associates.

3. THE GAMECHANGER: HOW EVERY LEADER CAN DRIVE EVERYDAY INNOVATION Author : A.G.Lafley & Ram Charan Published by : Penguin India (Portfolio), 2008; 336 pages, Rs.399. Oh, well, what is it here that we haven’t heard about before? We’ve all heard about how business must be ‘close-to-the-customer’ for it to be consistently successful. We know that innovation – by whatever name you call it; Market Research, R&D, suggestion schemes, kaizen or brainstorming – is extremely critical if we have to find new ways of doing things, or even if we have to look for new markets and new products. So why has ‘The Gamechanger’, co-authored by A.G.Lafley (Chairman and CEO, Procter & Gamble) and Ram Charan (Business Advisor and author) created so much of excitement among business leaders? Procter & Gamble (P&G) ended the 1999-2000 fiscal with results that were embarrassing to everyone in the company. Lafley, as the newly appointed CEO, had his team focus on a few key areas. Of the five areas they identified (customer-centricity, opening up, sustainable organic growth, organize around innovation and thinking differently about innovation), two were exclusively around innovation while one another was based on using innovation. The insight that innovation must be integrated into every aspect of the organization was the biggest reason for P&G’s stellar performance in the seven years since. The insight itself may appear simplistic; Lafley’s detailed explanation of how P&G did it, combined with Ram Charan’s complementary examples from several other organizations provide a rich lode of ideas and practices that we can draw from – and that’s the core appeal of this work. But for HR practitioners, there are some deeper insights. Although there are many references to ‘business leaders’ and ‘leader in charge of P&L’ using innovation in a game-changing manner, the drivers for this come from a very basic value system of accepting that innovation does not need any special skill. Very early on in the book, the authors acknowledge that “...innovation is a social process. And this process can only happen when people do that simple, profound thing – connect to share problems, opportunities and learning. To put it another way, anyone can innovate, but practically no one can innovate alone.” Isn’t that a challenge for the HR Manager, more than for anyone else? How does the HR Manager provide the tools for the business to harness innovation? April | 2009 NHRD Network Journal

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Thankfully, Lafley & Charan do not leave us completely clueless. The section on ‘Organizing for Innovation’ provides a set of criteria that can serve as a guideline in designing an appropriate structure for your organization. Examples of structures from organizations like Hewlett-Packard, 3M, Microsoft, DuPont – and very detailed descriptions of different enabling groups within P&G itself help us get an idea of how the set of criteria were evolved, which will then help us grow our own. Clues continue in the section on ‘Innovation is a Team Sport’; the creation of a culture which is more courageous, more connected and collaborative is almost a prerequisite for game-changing innovation. The elements of team building which are exhibited at P&G’s ultra-innovation Clay Street group create a set of ‘connecting behaviours’ which are populated across the organization by those using the services of the Clay Street group. Detailed descriptions about roles to be considered when building an innovation team help stimulate the HR Manager’s thinking about what it really takes to build a team for innovation. A breakdown of the elements of an Innovation Culture gives us a handy reference to check against. All of these make ‘The Gamechanger’ interesting for a HR Manager. Despite some old chestnuts (like ‘Rules of Brainstorming’ or a description of the stages of team formation in an innovation team), there are enough new approaches to make the book a very worthwhile read! Review by: R.Shantaram, Vice President - HR, Prasad Corporation Ltd., Chennai.

4. STRENGTHS BASED LEADERSHIP Author : Tom Rath and Bary Conchie Published by : New York: Gallup Press. p.265.(2008) This is yet another Gallup publication based on decades of research in scores of organization across the globe. A study of more than 10,000 followers around the world who were asked why they follow the most influential leader in their life, resulted in the following key findings: The most effective leaders • are always investing in strengths; • surround themselves with the right people and then maximize their team and, • understand their follower’s needs. About one third of the book is devoted to explaining the above in three parts. The next 140 pages are devoted to provide a guide to the 34 themes (around various strengths).

34 StrengthsFinder Themes Achiever Activator Adaptability Analytical Arranger Belief Command Communication Competition Connectedness Consistency Context 146

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Deliberate Developer Discipline Empathy Focus Futuristic Harmony Ideation Includer Individualization Input Intellection

Learner Maximizer Positivity Relator Responsibility Restorative Self-assurance Significance Strategic Woo

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The last 20 pages explain the research behind the StrengthsFinder, introduce the team working on Work Team Engagement and summarize the reasons why people follow their leaders. The research behind strengthsfinder is backed from the Clifton StrengthsFinder (CSF), which is an online measure of personal talent that identifies areas where an individual’s greatest potential for building strength exists. It helps individuals discover how to build upon their talents to develop strengths within their roles. The authors acknowledge that CSF is not designed or validated for use in employee selection or mental health screening. The strengths philosophy means that individuals gain more when they strive to build on their strengths. Strengths are viewed as extension of talent. The strength construct combines talents with associated knowledge and skills and is defined as the ability to consistently provide near-perfect performance in a specified task. Though the instrument is labeled Clifton (has had a long -50-year — career at the University of Nebraska) StrengthsFinder, the authors assert that the instrument actually measures talents that serve as the foundations for strengths development. Clifton considered success to be closely associated with personal talents and strengths in addition to the traditional constructs linked with analytical intelligence. The CSF evolved, over the years, into a 180 item one covering 34 themes. CSF is available in 24 languages and is appropriate for administration to adolescents and adults with a reading level of 10th grade or higher. In 2006 Gallup researchers undertook a comprehensive review of CSF psychometrics, which led to some revisions in the instrument (version 2.0). Several studies were carried out to investigate into the CSF’s continuing reliability, validity and applicability to both the general population and college students in particular (some of the recent studies were listed on pages 243 and 244). The CSF is often used as a starting point for self-discovery in Gallup strengths-based development programs. After a respondent has completed the assessment and talent feedback is provided, a set of developmental suggestions is customized to the idnividual’s Signature Themes for a more informed view of self. Gallup’s research of over 10,000 people also examinies leadership from the follower’s perspective and came out with the following key themes (or basic needs): •

Trust (other words cited by followers included: honesty, integrity, and respect)

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Compasion (other words cited by followers included: caring, friendship, happiness and love)

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Stability (other words cited by followers included: security, strength, support, and peace)

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Hope (other words cited by followers included: direction, faith, and guidance)

More than 85 per cent of respondents selected the leader who had the most impact ass someone very close to the person answering the survey. This is a research based book which uses psychometry to facilitate personal development and growth through self discovery, feedback and discussion with colleagues, managers and friends. For those who buy the book, there is a bonus: There is a packet at the end which contains the purchaser’s unique access code to take the StrengthsFinder 2.0 assessment. IF you are buying the book, after you complete the assessment, you will receive a personalized strengths-based leadership guide. www.strengths.gallup.com provides more insights and gives the research link. The marketing trick is that the access code is valid for one user only. Do not buy the book if the packet is missing or has been opened.

Reviewed by: Dr C S Venkata Ratnam, Director, International Management Institute, New Delhi. The author can be reached at [email protected] April | 2009 NHRD Network Journal

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ABOUT THE JOURNAL NHRD Network Journal Leadership Volume 2

Issue 2

April 2009

NHRD Network Board Members

The National HRD Network publishes a semi-academic quarterly journal-each issue dedicated to a theme. Publications so far include on the themes “IT in HR”, ”Performance Management”, “Attracting and Retaining Talent”, “Career Management”, “Organizational Change”, “Global HRM”, “Women in Corporate Leadership Roles”, “Organization Development” and “Learning and Development”. The current issue is on the theme of “Leadership” The plan for the ensuing issues is as follows:

National President:

Aquil Busrai, ED-HR, IBM India Limited,

Past National Presidents:

Dwarakanath P, Director-Group Human Capital, Max India

Date of Publication

Theme

Guest Editor

Dr. Santrupt Misra, Director Aditya Birla Group

July 2009

Work-Life Balance

Dr. C.S. Venkataratnam

Oct. 2009

Institution Building

Mr. S. Varadarajan

Jan. 2010

“HR for, and of Gen Next” — Leveraging Demographic Dividend

Dr. S. Chandrasekhar

Regional Presidents: East:

Prof. Madhukar Shukla, XLRI, Jamshedpur

South:

Gopalakrishna M, Director Incharge, A.P. Gas Power Corporation Ltd.

West:

Satish Pradhan, Executive VP Group HR, Tata Sons

The journal publishes primarily three categories of articles:

North:

NS Rajan, Partner, Human Capital and Global Leader – HR Advisory, Ernst & Young

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Conceptual and research based

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Contributions from thought leaders including a limited number of reprints with due permission

National Secretary:

Dr. P VR Murthy, CEO, Exclusive Search Recruitment Consultants

•

Organizational experiences in HR interventions/mechanisms

National Treasurer:

Ashok Reddy B, VP-HR, Info Tech Enterprises

Executive Directors:

Satyanarayana K (Hon.) Mohit Gandhi

Editorial Board

NS Rajan, Partner, Human Capital and Global Leader – HR Advisory, Ernst & Young, [email protected] (Guest Editor for this issue) Dr. PVR Murthy, Managing Editor, CEO, Exclusive Search Recruitment Consultants, [email protected] Aquil Busrai, Executive Director, Human Resources, IBM India Limited, [email protected] Dr. Pallab Bandyopadhyay, VP-HR-Asia Pacific, Perot Systems, [email protected]

Publisher, Printer, Owner and Place of Publication

Satyanarayna K, Hon. Executive Director, National HRD Network on behalf of National HRD Network, 506, Sai Siri Sampada, 7-1-29/23 & 24, Leela Nagar, Ameer Pet, Hyderabad 500 016. Tel: +91 (40) 2374-2429 [email protected]

Printed at

Nagaraj & Co. Pvt. Ltd., 156, Developed Plots Industrial Estate, Perungudi, Chennai 600 096. Tel : 044 - 66149291

The views expressed by the authors are of their Copyright of the NHRD Journal, all rights reserved. own and not necessarily of the editors nor of the Contents may not be copied, emailed or reproduced without copyright holders’ express permission in writing. publisher nor of authors’ organizations

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Editorial Board Members : Dr. P.V.R. Murthy, Managing Editor is a product of I.I.T., Kharagpur and IIM, Calcutta with close to thirty years experience in H.R. field. He is founder and runs an executive search firm Exclusive Search Recruitment Consultants. He is associated with a number of academic institutions. He is trained in TQM in Japan and in human processes from ISABS and NTL, U.S.A., He is the National Secretary of National HRD Network. Aquil Busrai is Executive Director Human Resources with IBM India. He has over 36 years HR experience, both in strategic and operational HR with blue chip organisations like Unilever in Kenya and India, Motorola in Asia Pacific and Shell in Malaysia. He is the National President for National HRD Network. Dr. Pallab Bandyopadhyay is the Vice President & Head, Human Resources - Asia Pacific, Perot Systems. A doctoral fellow from XLRI and AHRD. He is trained in OD and Human Processes from NTL, USA, he believes in applying HR concepts to practice to make it more meaningful and effective. He is a mentor and coach to many young HR professionals. NHRD firmly believes in and respects IPR and we appeal to the contributors to strictly honour the same.

For any further clarifications, please Contact : The Managing Editor Dr. P V R Murthy, CEO, Exclusive Search Recruitment Consultants, #8, Janaki Avenue, Off 4th Street, Abhiramapuram, Chennai 600 018. [email protected]

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Leadership

The National HRD Network, established in 1985, is an association of professionals committed to promoting the HRD movement in India and enhancing the capability of human resource professionals, enabling them to make an impactful contribution in enhancing competitiveness and creating value for society. Towards this end, the National HRD Network is committed to the development of human resources through education, training, research and experience sharing. The network is managed by HR professionals in an honorary capacity, stemming from their interest in contributing to the HR profession.

NHRD Network Journal

National HRD Network

ISSN - 0974 - 1739

NHRD Network Journal April 2009

Leadership

The underlying philosophy of the NHRDN is that every human being has the potential for remarkable achievement. HRD is a process by which employees in organizations are enabled to:

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acquire capabilities to perform various tasks associated with their present and future roles;

•

develop their inner potential for self and organizational growth,

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develop an organizational culture where networking relationships, teamwork and collaboration among different units is strong, contributing to organizational growth and individual well-being.

April 2009

www.nationalhrd.org

•

Volume 2

Issue 2

John Adair Arvind Agrawal Stewart D. Friedman Paul Hersey N.S. Rajan Dave Ulrich and Norm Smallwood Gary Yukl and Rubina Mahsud Anu Aga Sandeep Bakhshi Jaspal Bindra Peter Capelli et al Jim Collins B. Santhanam Vijay Bharadwaj Aquil Busrai Rajeev Dubey P. Dwarakanath Adil Malia Anand Nayak and L. Prabhakar Vivek Patwardhan Satish Pradhan Sanjeev Sahi T.T. Srinath Inder Walia

A quarterly Publication by The National HRD Network

www.nationalhrd.org

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