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R. Gopalakrishnan*, executive
director, Tata Sons, explains the need for and importance
of direction in today's business leader
In
all forms of organisations, managers face issues and
seek solutions. In the earlier part of one's professional
career, one is dealing with known issues and known solutions.
All training methods help professionals to migrate to
handle higher responsibilities, the highest being when
one is dealing with unknown issues having unknown solutions.
Therefore, top leadership by nature is risky. It is
this syndrome that causes people to read books, learn
from others' experiences and try to emulate success
formulae. This too is not easy.
As Nobel Prize winner Douglas
North postulated, to succeed, a country must have good
policies and good institutions. It is not too difficult
for one country to emulate the policies of another but
it is far more difficult to emulate institutions because
institutions include not just the laws, regulations
and their enforcement but also their social norms and
belief systems.
I came across an interesting
viewpoint from A. D. Moddie1.He argues that
a central, bureaucratic state spread over most of India
existed for only five centuries out of the 25 centuries
of national history — Maurya, Gupta, Mughal, British
and, of course, the post independence state. Therefore,
for most of history, India has been a loose confederation
of regional states held together by culture and trade.
During these 20 centuries of loose confederation, there
was no central service, revenue system, foreign policy
or standing army. Therefore, over a long period, leaders
have learned to tolerate ambiguity, which is non-destructive
but not constructive.
In India, we are collectively
engaged in an extremely complex task of modernisation
and deregulation, the outcome of which is uncertain
as well as ambiguous. Each day's news assails common
folks with self-doubt about whether the country is headed
the right way with the right leadership. In the past
centuries, one could make poetic virtue of this ambiguity
and uncertainty as did John Keats, who wrote to his
brothers, George and Tom, in 1817 about "the virtues
of negative capability when a man is capable of being
in uncertainties, mysteries, doubts without any irritable
quest after fact and reason."
The challenge of future leadership
is to understand the root causes of ambiguity, establish
the high leverage nodes, and act to influence the behaviour
of the system. In a climate of uncertainty, leaders
look for maps of how to get from one place to a target
destination. Psychologist Karl Weick has pointed out
that maps can help in known worlds which have been charted
before. Where the world has not been charted, the compass
is required, he argues, because amid uncertainty, it
gives you a general sense of direction. One needs to
rely on one's instinct to move ahead. To appreciate
better the metaphor of map and compass in organisational
leadership, I would like to briefly delve into the actual
world of the map and compass.
The map and the compass
The early history of the compass is less clear than
the history of maps. Historians2 believe
that Mediterranean and Chinese navigators possibly used
the magnetic compass to guide their ships in around
1100 AD. Until the 14th century, shipping trade in Europe
stayed close to the shore because it was dangerous to
stray too far from the coast and its landmarks. The
ships were also light and crude, scarcely different
from the ones that plied during the Roman times and
Middle Ages. For centuries, mariners refused to rely
too much on the compass. However, by the start of the
15th century, a begrudging respect grew for the compass
and innovations were made very rapidly.
Maps on the other hand are much
older. The oldest existing map appears on a clay tablet
made in Babylonia around 2500 BC. Claudius Ptolemy gave
shape to the subject in 150 AD when he brought together
his eight volumes entitled 'Geography'. European cartography
advanced in the 14th century because of two developments:
first, the translation of Ptolemy's work into Latin
and second, the invention of the printing press, which
facilitated duplication of maps.
Thus, from the 14th century onwards,
advances in shipbuilding, innovations in the compass
and advances in cartography all converged to lead to
the great adventures in exploring and conquering new
lands across the oceans. This changed the world permanently
over the next several centuries.
It is instructive to conjure
the difference in compass-led versus map-led managerial
leadership experiences by referring to the usage of
maps and compasses in the field of navigation. There
could be no map without charting the course. The course
could not be charted without straying far from the shore.
The shore could not be strayed from without a good compass.
As it has been written, the sailor felt that he was
left in a vast and indistinguishable space with no way
of knowing where he was or how to return home. Over
a hundred years ago, C. Raymond Beazley wrote about
14th century oceangoing: "…dragons and demons
preyed upon the unwary and whirlpools destroyed any
adventurer." Of such challenge is the task of modern
leadership. It is dangerous and risky. Leaders need
a better compass to navigate this ocean of uncertainty.
Why is the course uncharted?
Leadership is about change, and change can be technical
or adaptive3. When organisations face problems
for which solutions are known, i.e. maps are available,
then the bosses set out to do the work and they do so
by applying available current know-how, e.g. structuring
an acquisition or merger. This kind of leadership is
somewhat safe.
However, organisations also face
large issues for which there is no ready solution. The
solutions have to be discovered through adjustments
and experiments, e.g. consummating an acquisition or
merger through the people in the organisations. In this
situation, adaptive change is required which means the
grassroots people with the problem have to do the work
by learning new ways. This type of leadership is risky;
change appears dangerous to people because they confront
loss or challenge to lifelong beliefs. The leadership
challenge is to disturb people, but only at a rate they
can absorb. Think of the leadership challenges at the
national level posed by the piloting of reform in the
power sector or disinvestment. It is dangerous because
the leader risks being marginalised, diverted or attacked,
evidence of which is visible everyday. This happens
at the corporate level too. Jamsetji was criticised
when the Tatas bought a sick textile mill at Bombay
in 1886. It took him eight years to pitchfork this unit
into the top bracket of India's textile mills.
After Dorab Tata hugely expanded
the Jamshedpur steel capacity in 1916, prices collapsed
and the steel company was in danger of closing down.
It took a pledge of his personal wealth and some providence
to rescue the fledgling company. More recently, when
Ratan Tata proposed the payment of subscription by Tata
companies to shares of Tata Sons and to a Tata Brand
Equity Fund, there was huge public criticism. Eight
years later, the financial and brand benefits to the
wide body of shareholders are visible all around.
And so the areas of criticism
continue — the launch of Indica, the entry into
telecom and, for sure, others to come in the future!
Some commentators define good
leadership by studying unsuccessful leaders4.
Coriolanus, the Roman general, was a great warrior,
a man with a strong moral sense but an utter inability
to reach out to the people of Rome and engage them in
his vision. His mother encouraged her son repeatedly,
but Coriolanus just could not connect with his people
because he was somehow convinced that doing so would
compromise his integrity. Shakespeare opens his tragedy
play, Coriolanus, with the Romans on the street being
addressed by a citizen, "First, you know Coriolanus
is chief enemy to the people. Let us kill him, and we'll
have corn at our own price. We are accounted poor citizens,
the patricians good… the leanness that afflicts
us, the object of our misery, is as an inventory to
particularise their abundance… the gods know that
I speak this in hunger for bread, not in thirst for
revenge…" There are several modern day versions
of Coriolanus.
Doug Invester lasted 28 months
as CEO of Coca-Cola after the legendary Roberto Goizueta.
He was seen poorly for his insensitivity to ethnic minorities,
his inadequate response to adulterated coke in Europe
and several other failures of adaptive capability. Eckard
Pfeiffer of Compaq was fired for surrounding himself
with yes-men and ignoring those who would speak truths
to him, thus isolating himself from employees and customers.
As Aldous Huxley observed, "Experience is not what
happens to a man. It is what a man does with what happens
to him." To the extent one can validly isolate
one single quality that determines success, it is adaptive
capacity, i.e. that ability to understand context and
the capacity to struggle in the experiences encountered,
but not get stuck in them or get defined by them.
Sensing - Thinking - Doing
- Correcting
The compass was used in the early days of shipping through
a four step process, i.e. sensing - thinking - doing
- correcting. Since there are no simple ways for organisational
leaders to avoid the risks of leadership, these four
steps suggest a good way for them too to use.
- Sensing
The homing pigeon is unique in that it has a sense
of direction (compass) as well as a sense of location
(map). Jonathan Hagstrum, a researcher at the US Geological
Survey, has postulated how. Pigeons can hear very
low frequency sound, called infrasounds. When the
ocean waves bang against one another, infrasounds
are generated. Infrasounds travel thousands of miles
from their sources, so the pigeon always has a sense
of where the ocean is. These infrasounds also reflect
from the local terrain like mountains and cliffs,
so the bird gets an excellent acoustic picture of
its surroundings. This is what makes the pigeon's
compass and map sense so unique.
On Sunday, 29th June 1997, a great race was held to
celebrate the centenary of the Royal Pigeon Racing
Association. More than 60,000 homing pigeons were
released at 6:30 a.m. from Nantes, France flying to
lofts all over Southern England. They should have
arrived at their lofts by early afternoon. They didn't.
A few thousand out of the 60,000 straggled in over
the next few days. In pigeon racing terms, this was
a disaster. What happened? Hagstrum found that at
about 11 a.m. when the pigeons were crossing the Channel,
a Concorde airliner was flying along the Channel.
A supersonic airliner generates a shock wave down
towards the earth, almost one hundred miles wide.
Most of the birds must have been caught in this shock
wave. This prevented them from listening to the infrasounds
which guided them, thus they lost their bearing and
their way.
The most important requirement for a leader is not
to get caught in a shock wave that prevents him from
sensing. Jamil Mahuad had been a very successful mayor
of Quito province and probably therefore he was elected
president of his country, Ecuador. Eager to show quick
results, he became very focused on providing a short-term
remedy for the mounting problems of his countrymen.
Later he himself admitted, "I have lost my connection
with the people." On the other hand, when Lee
Kuan Yew first became prime minister of Singapore,
he took precious time from his daily schedule to learn
Mandarin, the language of his constituents.
- Thinking
Thinking about the context, thinking networks by not
only finding allies but keeping close to those opposed
to the new ideas are all part of a success plan. For
many years, as a competitor from Unilever, I had been
an admirer of P&G. I was quite surprised to see
the departure of Durk Jager who took over in 1999
from his legendary predecessor, also known as the
Prince of Darkness. Durk Jager was a man of considerable
vision who saw the need to modernise the tradition-bound
consumer goods giant. Jager planned a complete organisational
overhaul, a cultural revolution. He moved before he
was able to get the rest of the company behind his
innovative plan for change, before he could form networks
with allies. It does not matter whether his plan was
good or not, he never managed to communicate the urgency
and superiority of his new vision for the company.
He did not survive the turmoil he unleashed, in large
part because he did not think networks and allies.
To survive and succeed in exercising leadership, you
must also work as closely with opponents as you do
with supporters. In fact, opponents deserve more of
your attention not only as a tactic of strategy and
survival but also sometimes as a matter of compassion.
Consider how our national leaders deal with the disinvestment
issues. By its very nature, there will be conflict
and heat, so the leader needs to create a holding
environment within which people can tackle tough,
divisive questions without flying apart.
The late Rajiv Gandhi lost the 1989 election, partly
because he was seen widely as westernised and elitist.
In fact, it was Mrs Gandhi who really launched economic
reform in 1980, rejuvenated in 1985 by Rajiv and abandoned
by him in 1987. In 1991, Narasimha Rao faced pressure
from the reformers for a Big Bang approach. Very boringly,
he chose the middle path, which he articulated at
the Tirupati Session of the Congress party. By not
decrying Nehruvian economics, by projecting his policies
as a continuity with the past, by being seen to learn
from Asian experience rather than Western experience,
Narasimha Rao created networks with his allies as
well as ways to track his opponents.
- Doing
Many leaders are excellent thinkers. They develop
the correct visions, often grand ones. They go public
with their thoughts or even launch their initiatives
in the hope that somebody will dot the I's and cross
the T's. Then too late, they notice a gap between
what they want to achieve and the ability of their
organisation to achieve it. Strategies often fail
because they are not executed well, not because they
are bad strategies5.
Richard Thoman was CFO at IBM, a protégé
of Louis Gerstner. He was a highly respected strategist.
Xerox hired him in 1997 as COO to usher in change.
As COO, he launched numerous cost-cutting initiatives,
and laid the groundwork for a new strategy. Two years
later, the board elevated him as CEO and he was one
of the most thoughtful people to head a major American
company. At his first annual meeting as CEO, Rick
Thoman told his shareholders that Xerox was poised
on the threshold of another period of great success.
The stock prices shot up to new highs.
One year later, Rick Thoman was fired by Chairman,
Paul Allaire. What went wrong? Thoman had launched
two major initiatives both of which were necessary
and important. One related to consolidating the 100
administration centres of the company, and the other
related to re-organising the 30,000 strong sales force.
Xerox's clubby culture had not quite taken to an outsider
and so he was too aloof to connect with the people
who had to execute the changes. So, the organisation
failed to execute Rick Thoman's vision and promises,
morale dropped, cash flow from operations went negative
and the stock price plunged.
While strategy thinking has been recognised and taught
as a discipline, strategy execution has not. Top management
knows deep down that something is missing when commitments
consistently fail to get delivered. They search and
struggle for answers, benchmarking competitors, rationalising
the differences and looking for answers in the organisational
processes, culture and structure. In the name of delegation
and trust of subordinates, they fail to do persistent
and constructive probing, e.g. Where will the increased
sales come from? What will competitors do? What if
the economy takes a turn? And so on.
Apart from the lack of execution discipline, another
enemy of "doing" is the misjudgement of
how to pace the work. In 1994, President Clinton recommended
sweeping healthcare reforms that involved radical
changes in the financing and delivery of healthcare
services. To generate that magnitude of change, Clinton
needed a process of education, explanation and persuasion
that would have taken years with small experiments
all along the way. However, Clinton believed that
his election in 1992 gave him the mandate and he pressed
ahead with his proposals. There was great opposition,
his own popularity crumbled and the media wrote stories
wondering whether he was still relevant!
- Correcting
When a leader has sensed, thought and done a few things,
signals for corrective actions and improvements emerge.
Those have to be picked up, internalised and actioned.
This requires the leader to engage his top team in
collective learning. A good way to illustrate this
is through an example from nature:
In the Britain of the early 1900s, milk bottles supplied
to homes were without any caps. Two garden birds,
the blue jay and the robin, had both perfected the
art of sipping cream from the bottle. After the World
War II, tin foil caps on bottles were introduced.
The blue jays soon learnt to peck the caps open and
continued to sip the cream while the robins could
not. On researching the success of one species, zoologist
Alan Wilson found that blue jays moved in flocks of
14 or 15 birds. The parents stayed with their young
ones till they were old enough to take care of themselves.
Hence, the learning by one bird was quickly and efficiently
shared among the entire flock. On the other hand,
the robin was a loner. The male robin defended his
territory rather fiercely and was antagonistic to
other birds of the species if they came too close.
Hence, sharing between robins was non-existent. His
conclusion was that innovation, social propagation
and mobility allowed blue jays to enjoy the cream
and grow healthy.
Conclusion
I would like to conclude by expressing optimism about
the future of our country and her people — not
because it is a nice way to conclude but because in
our own uniquely Indian way, we are facing up to the
emerging leadership challenges. In our bouts of despair,
we forget how much we have changed in 15 years —
no need to shop anymore for the family on foreign trips,
multiple choices of cars, deep penetration of communication
and media with more to go. Surplus food and foreign
exchange were not conceivable to us just 10 years ago.
As Saint Tiruvalluvar wrote in the Kural several centuries
ago:
If those who think to achieve,
Have a firm and focused mind,
They will realize what they thought of,
And even as they have thought of.
"While it is imperative
to learn to live with and, in fact, manage change for
success – the bedrock of a lot of business lies
in its approach to - ethics and integrity. This will
form the basis of the session being led by Mr P. M.
Sinha early tomorrow morning."
References
- The
Failed Mahabharata by A. D. Moddie
- Ruling
the Waves by Debora L. Spar
- Leadership
on the Line by Heifetz and Linsky
- Geeks
and Geezers by Bennis and Thomas
- Execution by Bossidy
and Charan
*Keynote address by R. Gopalakrishnan,
executive director, Tata Sons Limited, at the Eight
Annual Chief Financial Officers' Roundtable organised
by IMA India in Jaipur on, February 15, 2004.
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Uploaded on January 31, 2005
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