May 2005

Soft strokes, hard battles

In coversation with Christabelle Noronha, AS Ganguly, the former chairman of Hindustan Lever, flies the flag for leaders who listen, who influence and inspire while keeping partiality and hubris at bay

A. S. Ganguly

The business leadership challenge in India has been transformed from what it was prior to the 1990s, most significantly by the globalisation of trade and commerce and the consequent need to reduce costs, raise quality and innovate vigorously. In the old days, business leaders in this country had to be armed with bifocal vision: one focused on their business and the other on our masters in Delhi. Today's environment demands a much broader understanding of industries, markets, customers, competition and more.

The global dynamic has, in a way, led to a kind of homogenisation of the art of business leadership. I don't think leadership issues in India are much different from what they are in the US or Europe (if that were the case, you would not have so many successful Indian leaders on the boards of American and European companies). The challenges are not dissimilar, but leaders here have only begun to comprehensively cope with matters such as corporate conduct and governance, balance sheet management and accountability to shareholders and society.

The distinctiveness in the Indian entrepreneurial model springs from its non-monolithic structure. There are professionally managed Indian enterprises, but the vast majority of companies in this country are owner-managed. The big challenge for our professionally managed companies is to continue to attract, nurture and have an uncompromising attitude and commitment to meritocracy. An owner-managed company is more involved in sustaining control, hence their ability to attract managers who could revolutionise their business is restricted. There is an attempt to move towards meritocracy among these family enterprises, but few of them are able to make the distinction between their right to inherited wealth and the role of professional management to enhance value.

Is the pool of leadership talent in India big enough for everyone to draw on? I don't think so, not yet, but the tribe of Indian leaders is growing quite handsomely. Entrepreneurial leadership amongst middle-class Indians was not a widespread phenomenon till about 25 years ago. Who could have forecast that this gene, so to speak, would express itself in middle-class India so profusely? My generation looked for a stable job and, if you were successful, that was it. Today the concept of lifelong employment in a single company or organisation has almost disappeared. I consider this — people seeking new avenues to create wealth — the most wonderful change that has happened in India. I believe this attitudinal change is a product of the knowledge revolution.

I want to share with you my concept of India's business leadership. The toughest talent filter in the world is our joint entrance examination, which throws up the best young minds in the country year after year. We are restricted by the size of the talent filter, restricted by the capacity we have to train available talent, but our capacity is growing rapidly. Imagine the thousands who do not pass through the filter and the additional talent pool they represent. If we build more institutions of higher education, we will be able to grow significantly more talent.

We are sometimes unfair to ourselves in wondering whether we have enough of talent resource. Fact is, no country in the world, with the exception of China, has as much talent flowing into the national stream every year. If we accept that talent is what we need as raw material, in the age of the knowledge revolution, then there should be no reason why India cannot be one of the leaders, if not the leader, in wealth creation, in the 21st century.

Where Indian companies falter in the competition with multinational enterprises to access this talent is in their relative inability to provide as many opportunities for, what I term 'leadership expression'. It is essential to create an equal-opportunity corporate environment and that can only be done by nurturing an uncompromising commitment to meritocracy, one which does not accept that the head of the company has to be a son of the owner. There is an ownership glass ceiling in India that we don't seriously debate.

Hindustan Lever has been successful in nurturing leaders from within, because of its unyielding commitment to meritocracy. As senior managers, we spent time in recruitment, even more time in training and development, and were uncompromising when it came to recognising and rewarding the right people. We gave people a free run to perform and be judged by performance and interpersonal skills.

As regards collective leadership, the concept may be an oxymoron. I think the ability to enlist talent in order to solve problems is a construct of individual rather than collective leadership. Collective leadership leads to confusion. For instance, in Unilever the collective leadership concept has outlived its utility. I am old fashioned, but I have not seen evidence of successful collective leadership across the board, in the US, Europe or India. The Japanese style of leadership may be consensual, more than that it is inspirational, but it is not collective. In Japan, a leader spends much more time and effort, than in any other society, to enlist the commitment of his or her colleagues.

The Lee Iacocca style of leadership, the big thing in the 1970s and '80s, is what I call the cheerleader archetype where everybody has to follow a one-man juggernaut. The leader as surgeon and the leader as icon are two different styles of leadership. The Iacocca style of leadership was critical when his company was ill and needed radical surgery in order to revive itself.

The power of leadership is derived from having power but not exercising it. Having the power and not exercising it is one of the greatest qualities of a leader. If a leader has to exercise his/her powers it means he/she has failed as a leader. Most successful leaders are preoccupied with nurturing others rather than with advancing themselves. Leaders who are dictatorial and ruthless, who don't listen to people, may succeed for a while, but are ultimately doomed to failure.

Leadership is a combination of certain innate competencies of individuals and a corporate environment which enables those innate competencies to blossom. I don't quite have the answer as to what role the wider environment — culture, family, friends, school, college, etc — play in the moulding of leaders, but, if you take India as an example, our middle class ethos of hard work, respect for the family, etc, must have some impact. The entrepreneurial explosion that we are witnessing in India could not have been artificially created or sustained.

The leadership tradition in Europe has a commitment to scholarship, as opposed to the free-spirited, wanting-to-win culture that obtains in the US. In India we are now in the process of evolving a new culture of leadership. Is it going to be a high-earning, high-spending fun culture, or is it going to be a wealth-creating culture that is socially caring?

I think the jury is out on this, but if Indian middle class values are sustained, then we will have a culture derived from, on the one hand, a deep desire to compete, succeed and be counted among the world's leaders, and, on the other, to be deeply conscious of the enormous problems of poverty in our society which need to be urgently addressed. Above all, a successful leader must be a good human being.

What qualities helped me reach the top? In retrospect, I think the most important was my caring and concern for people. This is not something I cultivated; it came from within (I would like to believe I inherited this aspect of my character from my parents and grandparents). While recalling this I do not underestimate the skills and competencies that have to be innate in a leader to undertake tasks successfully, to build bridges, to initiate dialogue, to make the other person see one's point of view, and to have the humility to understand the other person's point of view. Finally, it boils down to a leader's ability to compromise and find answers without sacrificing the principles one believes in.

The people who influenced me most while I was coming of age were some of my professors at Bombay University, who took a special interest because they concluded that I had certain talents of which even I was not aware. I was a fun-loving fellow then. I had an indifferent school record but I did well at university; I think that sowed the seeds of my future. But the person who transformed my worldview was my professor and advisor during my postgraduate studies at the University of Illinois, USA. His name was Robert McLaughlin Whitney; sadly, he passed away following a car accident some years ago. He planted a wonderful spirit of enquiry in me and he also taught me to say, "I don't know". These seemed trivial at that point, but eventually changed the course of my life — the way I dealt with problems and difficult situations, with success as well as setbacks.

*AS Ganguly was the chairman of Hindustan Lever from 1980 to 1990. He is currently chairman of ICICI OneSource.

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