"History is full of successful CEO's whose arrogance has led to the downfall of long-established businesses." (Co-author) Ujwal Thakur Head (Retail Banking), BNP Paribas

Leading and managing organisations in transition is a tough call in today's business environment. There is a constant struggle to balance the seemingly conflicting demands of stakeholders and analysts on the one hand and internal capability issues to manage and sustain change on the other. The history of organisation transformation efforts across cultures and geographies show that the apex leadership finds itself caught in a conundrum: dramatic results first or culture-transformation first?

A sustainable transformation requires several things. Four are vital:

• Ensure a clear mandate from key stakeholders: Dramatic changes in strategic direction put the established business at risk. These changes often challenge past business decisions and, therefore, cause major shifts in power/relationship dynamics. A new person taking over the business needs to spend time up front to determine the precise nature of the mandate and understand the dynamics at the highest level to ensure that he/she stays in the game. The leader then needs to balance the drive for results with personal style, constantly adapting, and working with people. Did Hari Sharma do enough of this? Perhaps not.

• Build top-team alignment: There cannot be two people driving the performance journey. Once a mandate has been secured, the company's new chief executive must spend time understanding the top leadership team. It is important for him to assess, evaluate, and understand the strengths of each team-member and forge them into working together. It is critical to understand who is 'on the team' and then work with them to achieve an alignment of the vision, values, aspirations, and performance ethics.

Hari's style was bound to 'ruffle feathers' and as the case says his aggressive style was out of place in the bank. It is important to understand whether the new successes the bank was experiencing were seen to be the individual accomplishments of Sharma or the result of the new direction set for the bank by the top team and steered by a capable and experienced hand. If it is the former, the cracks are likely to be irreparable.

There are significant differences between British and American styles, typically in the areas of result-orientation, speed of implementation, communication style, and process-orientation. These cultural gaps can't be bridged in a short span of time. It needs patience and understanding on everyone's part-the new CEO needs to understand the dynamics; and the existing team has to adapt .

This is where the third element comes into play.

• Diagnosing the strengths and weaknesses of the culture to meet the new demands: However experienced the new CEO is, he cannot drive sustainable change unless he understands the pulse of the organisation and the 'how' of business decisions and implementation. Did Sharma spend time upfront understanding the dynamics across the organisation? Did he spend time getting a critical mass of people aligned with him and did he figure out what needed to be changed in the culture to match his ambitions for the organisation? The crisis suggests he did not.

• The fourth critical element is that of building a road-map for change. What are the key levers that need to be worked on specifically around organisation design/structure, capability building, performance metrics, and communication?

"Cultural gaps are rarely bridged in a short span of time. They need patience and understanding. (Co-author) Matangi Gowrishankar Head (HR), Cummins India

Given New England Bank's situation, it does not appear that its team, Adams or Sharma paid much heed to many or any of these key elements. Sharma has obviously achieved all of the financial and strategic goals expected of him and was successful by any external parameters of performance assessment. But the moot point is whether his success resulted in intellectual arrogance. History is replete with stories of very successful CEOs whose arrogance has led to the downfall of long-established businesses.

In the long run, the crisis will hurt the organisation and the present team more than an individual like Sharma, who has a track record of strong performance and success behind him. The top team at New England Bank needs to examine their motivations for change and how far they are willing to go to accomplish this success. In the final analysis, Sharma's departure in the circumstances is probably best for both-but the question remains: will the New England Bank ever make the transformation that is needed to ensure its survival?

New England bank made a strategic selection. Horses for courses. Changing market scenarios, critical business needs, and appropriate timing drove its decision. All these are external factors. The bank hired Sharma because it needed a leader, a winner, with a leadership style that could stimulate the organisation to grow. For our analysis we need to understand the organisation model, the leadership style, and the organisational culture.

Sharma attempted the creation of a performing organisation, where the bottomline is paramount, where financial focus is the primary objective, where rigours of feedback are high and tolerance for failures low, where the culture is more survival-driven than value-driven, and where goals are non-negotiable. The organisation was focused on the external factors and demanded aggressive internal performance to keep pace with growth.

Sharma's leadership style was that of a driver driven by a performance system that overrides all other considerations and makes targets an important element for achieving results. The focus was on priorities that were determined quickly, followed through decisively. Different parts of the organisation are focused on their own deliverables.

"Sharma has served his time and achieved his strategic selection goals. The board now needed a builder." Ganesh Sharmon, Partner, Andersen

But Sharma now works in a culture that was, until his arrival, alien to aggression. That means discomfort at aggressive deadlines, early-mover strategies, and merger-led growth. People become sensitive to radical changes that they know were not a part of the bank and its culture in the last few decades. Since cultures are temporarily confinable to commercial compulsions, issues did not surface earlier.

However, attempts to create a performing organisation, using a driver-led leadership style was effective at New England Bank as long as the intended hiring objectives were relevant. And as long as the native cultural issues could be suppressed for commercial purposes, while establishing current business performance, building critical mass in terms of size and setting the organisation to a path for consolidation.

Thereafter, the choice of another leader appeared very appropriate for Adams and the board. For the board, Sharma had served his time and their strategic selection goals were achieved. Now they needed a builder.

A builder-driven leadership style is one that will focus on building for the future through institutional processes, demanding systems that connect organisational functions, and work through structures that are streamlined, regulated, and planned. A builder, who is an optimist and provides encouragement, provides job clarity, and coaches and rewards his team for performance. This builder fits best in the culture that had all along existed in the New England Bank.

In summary, this is an open and shut case. Hiring Sharma had nothing to do with either influencing organisational change or facilitating an interpersonal congruence between Adams and Sharma.

But in reality, organisations exist. So do cultures. And so do the leaders who have the responsibility to understand, manage and influence culture to enable a lasting change. Neither Adams nor Sharma was prioritising it. As organisations grow so do cultures. Yet growth in organisation and change or impact in culture does not mean similarities or incongruent aspects of the culture. As organisations grow so do its people and more particularly so do its leaders. As time passes, these leaders in turn begin to influence the organisation culture.

If the norms of influence had been followed, Sharma would have moved from a Performing Organisation to that of a Competing Organisation and his leadership style would have evolved from that of a driver needed for performing organisations to that of a visionary necessary in competing organisations.

But for New England Bank, Sharma, the leader, was not brought to change the culture. He was brought for a strategic reason, turnaround, and once that was accomplished he was dispensable.