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[Contn.] Managing Change In Times Of Turbulence
Q. What professional skills are required of a CEO in managing change? A. The most obvious skill is a proactive skill of keeping one's antenna on the ball. But a CEO has to walk on a thin line here. It should be done without creating a sense of panic. A CEO must make certain that people are aware of which way the wind is blowing. When such a mindset pervades across the entire organisation, it prepares everyone for change. That is usually half the battle won. Can there be an action plan for managing change? The CEO should know what he is good at, but more importantly, he should know what he is not good at. That helps acquire and nurture complementary skill-sets around him. The second requirement is to build teams right across the middle of the organisation with specific mandates. And specific timeframes. The latter is important. David Pottruck, co-CEO of Charles Schwab, who is an alumnus of Wharton, calls it ''Leading from the middle''. This is where the 'magic' of change takes place. This is where you see the power of teams. What's the most difficult thing to do for a CEO in managing change? By and large, it pertains to people. The most difficult thing is to let go of someone who is delivering value but does not fit in with the core purpose of the company and the values it stands for. A CEO should not compromise on the larger organisational interests. "VALUES
HAVE TO BE NURTURED"
Anil Ambani: Yogi, what are your core values at ITC? Yogi Deveshwar: One of the basic things in any organisation is to have something super-ordinate. Commercial organisations are economic organs of the society. You have to subordinate shareholder value to societal values. Dignity of a human being is fundamentally important. Leadership is what makes the below average person to rise and contribute to a societal change. Rajat Gupta: I want to say a few things on core values. Values differ with each organisation. Our core value is our client interest. One of our strong values is meritocracy and people, and that's why we attract the best. The values are rooted in business purpose. M.S. Banga: Much of what I have to say has been said by my seniors at IIT Delhi. If you get them right, the values can be inspirational. They can make people want to belong to an organisation. Second is the point that Rajat made. Values help in decision-making. There are issues for which solutions aren't easy to find. That's when you go back to your values. The other important thing is how do you keep the values going? We often assume that values are there and they continue to exist. Values have to be nurtured, strengthened, reinforced, and most importantly, demonstrated. It takes just one step to destroy a value-framework created over a decade. Patrick Harker: Superficially, there are conflicting cultures at Wharton. But dialogue gets beyond the surface. Part of a leader's role is to push people beyond a superficial response and go deeply into the values. Deepak Parekh: I think ethics in management is extremely important in getting shareholder confidence. Decision-making has to be transparent and there should be no ulterior motive. Shareholder value is built through having ethics and transparency. Whatever decision you make in the boardroom, the likes of Aroon should be able to publish that. Carrying your senior managers along is very useful. Ambani: During these times how do we get the media to give an opinion that is constructive. Only negative news sells. Vindi, as the biggest advertiser, could you give any insights as to why positive news doesn't sell? Aroon Purie: This is a major issue we face with the government as well, which accuses us of neglecting the positives. The answer lies in the society. We mirror what the public wants, just as you create a product according to the consumers' needs. Media too is a business. It is not a social service. It has to cater to what the public needs. When Afghanistan happens we can't focus on anything else. K.V. Kamath: Sometimes it is difficult to appreciate when positives are not highlighted, especially if they can do a lot of good. Manufacturing is down, but the services sector is growing faster than ever. Why is that not highlighted? Gupta: One of the responsibilities all leaders have in turbulent times is to communicate with the external world. All of us have a much higher responsibility and this is true for everyone. I'm sure there is sufficient competition in the media and it will force everyone to highlight the positive news once a start is made. Deveshwar: Media is an organ of the society. It has a role to play in changing societal expectations. It should bridge the gap between perception and reality. If the reality is different, it's the media's role to portray it superseding the perception. Banga: I would contradict what the learned media person says. Look at films. Amidst films that portray modern day angst and violence, there are also joyous and happy films that do succeed. So you can't blame it on the readers' taste. But it's still perfect as long as there is integrity of reportage. Purie: Right across the society, there is this tendency to shoot the messenger if we don't like the message. Since this is a forum of businessmen, I must say that credibility is most important for the media. This is where you can support credibility rather than bend it for your own ends. Everyone likes a favourable story and they use all ways to get it done. By doing this, you are destroying the vehicle that you want to serve you. So responsibility lies with both the sides to make sure media remains a tool that serves the society. "WHAT
ABOUT ENTREPRENEURS?"
Sabeer Bhatia: All of you have spoken about core values in a downturn, but nobody has said anything about entrepreneurship. Rajat Gupta: Turbulent times create uncertainties and age-old practices go out the window and the true spirit of entrepreneurship is kindled. On the flip-side, there are problems getting venture funding. In that sense it's good that the time tests your fundamentals and it separates the men from the boys. Q: Pat talked about co-production in the context of making the customers your employees to improve productivity. How do you apply that in a downturn? P. Harker: The idea comes from services like net banking. Here it is the customer that is doing a lot of work. The customer becomes a partner and helps you fulfil your needs. Q: In a downturn, how do you strike a balance between long-term and short-term value? Yogi Deveshwar: Take the position of the organisation on a tripod stand of profitability, market standing, and vitality. If you have enough resources and vitality, the others will follow. You have to trade short term for the long term and keep the people hooked on to you even in turbulent times. Anil Ambani: A final question from my side. For seven years, Enron was voted as an icon of innovation. What has brought it to bankruptcy? I think Kamath should answer the question as a lender, and Rajat as the guys who advised them. K.V. Kamath: First of all let me clarify that we haven't lent any money to Enron. I guess in the final analysis nobody knows what went wrong. It's all about credibility and the company lost it. Gupta: They were or are still a very innovative company. But they carried it to an extreme and didn't pay attention to their values. 1 | 2 |
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INTERVIEW WITH PATRICK T. HARKER
