People; Leadership :Leading through nuances

TRIMILLENNIUM MANAGEMENT : LEADERSHIP
Leading through Nuances

By L. Zappei, with J. O'Toole & N. Bahadur

Why do some companies continue to succeed when they have no inherent advantages? Why is it that most industries have a handful of champions and many also-rans? Clearly, these organisations have an intangible yet crucial attribute accounting for their consistent long-term success. This is leadership. Leadership is the energy which provides vision, strategy, and objectives to a group, whether a small company or a nation.

Leadership has often been closely aligned with vision and direction. A major challenge of leadership is to identify-or create-common ground where diverse interests of followers can be made to overlap. The freedom fighters led by Mahatma Gandhi envisioned independence from the British as a unifying factor for the diverse Indian populace.

The leaders of the Ford Motor Co. in the 1980s saw that a concern for quality could bridge the differences between union and management, staff and line, marketing and finance, and engineering and operations. Leaders often do not create a vision themselves, but invariably initiate a process for developing it and generating buy-in. Their tasks include selecting a leadership team, creating a shared vision through listening and identifying the needs of followers, building a case for change, and linking it to their needs.

Successful leaders instill a sense of self-confidence in followers. Communication of the organisation's vision, goals, and principles is the adhesive that binds a leader's efforts. Robert Goizueta, Coca Cola's leader, had a flair for communicating the essence of a complex idea in a simple phrase: ''Each of the 6 billion people on Earth drinks, on an average, 64 ounces of fluids daily, of which only 2 ounces are Coca-Cola.''

Establishing the appropriate behavioural and reward structure is a critical task for leaders. It is important for leaders to focus on the essentials, define the levels of empowerment, reward learning, and innovation. Most systems of evaluating performance are still output-oriented and number-driven which encourage unintended competition. At ABB, the performance measurement system, abacus (the C stands for communication and not control), evaluates criteria such as generosity, co-operation, innovation, and flexibility apart from numbers. In addition, leaders focus on performance through reframing business challenges, linking metrics to accomplishment, creating a sense of urgency, and energising the organisation.

It has often been argued that the tenets of leadership would differ depending on regional culture, customs, and environment. And that there is a distinct US, Indian, or Chinese style of leadership. Undoubtedly, business practices, customs, and consumer needs would differ depending on the region of operations. However, key leadership characteristics tend to be the same. IKEA's furniture and its concepts of space management vary widely in the 29 countries where its 142 stores are present; but its philosophy, values, and unique style is the same. Its management principles of openness, egalitarianism, informality, consensus-based decision-making, learning by doing, and sharing information at all levels transcend national boundaries.

Finally, most leaders align their organisations by creating appropriate structures and inculcating the process of adaptability throughout the organisation. In the 1970s and 1980s, technology change was a key driver in the rapid growth of new markets as well as excess capacities, slowdown in growth, and increasing cost competition in traditional markets.

The key strategic issues of raising capital, achieving economies of scale, dealing with product and market diversity, and the competitive position were primarily managed by concentrating on the processes of planning, resource allocation, and monitoring and control. The 1990s witnessed different competitive dynamics in the form of the globalisation of competition, market- and technology-led customer focus, accelerating technological changes that extended boundaries, increased need for speed and flexibility, and cutting-edge infotech. The liberalisation of the Indian economy in the 1990s witnessed a significant change in the challenges facing Indian businesses.

Where, once, the major test of corporate leaders was in managing the government and the bureaucracy, today's leadership challenges are concentrated on competitive dynamics, domestic as well as global. Business restructuring, focus on core competencies, and business process re-design are, thus, the key tasks forced on the Indian businesses. The key to creating leadership advantage is through developing a structure which allows for the continuous self renewal of leaders across the organisation.

The successful development of leadership capabilities requires a transformation on 3 dimensions-content, processes, and people-in an integrated fashion.The content focuses on objective-driven change that draws on the vision of the organisation to create implementable programmes of change. This dimension underlines institutionalisation of system and behavioral modifications to build the capability of continual response to shifting conditions. The process deals with successful management of change initiatives. Key capabilities for programme management include leadership and relationship management, initiative detailing, alignment of resources, integration and monitoring of programmes, and communication and education of insights.

The people path is the cascading of change from the CEO down to the first level of the organisation. This is developed through a combination of sponsors who articulate and ideate leadership changes, agents who implement the initiatives, and targets who participate and learn the new requirements. In summary, Lao-tzu understood leadership 2,600 years ago:

A leader is best,
When people barely know he exists,
Not so good when people obey and acclaim him,
Worst when they despise him.
''Fail to honour people,
They fail to honour you.''
But, of a good leader, who talks little,
When his work is done, his aim fulfilled,
They will all say, ''We did this ourselves.''

L. Zappei is the Managing Partner (India) and N. Bahadur is an Associate at Booz-Allen & Hamilton (India), and J. O' Toole is a Professor at the University of California

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