Leadership’s Five Worst Mistakes to Avoid

Leadership is looked upon as the ultimate capability to succeed. Leadership is unique in that its success comes from the success of the teams that leaders lead. Leadership is, therefore, nothing but influencing the teams to perform to their full potential. Leaders typically possess a set of skills and attributes which they deploy in certain styles to lead the teams. Though leadership is, in part, contextual the broad set of leadership competencies remains the same. Many times leadership is based on excellence in a few attributes relative to others. The attributes of relative excellence could be any or some of the following (illustrative): conceptualization, strategy, decision making, execution, public speaking, memory, agility, perfection, empathy. The ability of the leader to influence his or her team members to succeed, based on such attributes, creates a leadership charisma.

Leadership charisma reinforces the success competencies of a leader leading to a virtuous cycle of success and charisma, in an ever increasing trajectory. Along with that comes a sense of infallibility and invincibility, fuelled by relative superiority. In some leaders it just remains as a streak and in some leaders it starts becoming a dominant stream. When the latter happens, leaders start committing certain mistakes with the assumption that their supremacy is unchallenged. This approach, in the long run, becomes counterproductive to the leaders and their organizations because, more often than not, the team comprises potential leaders who with time and given the space could step into the leader’s shoes. The sense of relative superiority, which is a result of self-perpetuating cognatic bias of a leader, prompts him or her to commit certain mistakes. Discussed below are five of the serious mistakes a leader can ever make, and should never make.

Competing with team

This is the most common mistake successful leaders make. A wise leader recognises that his direct subordinates could be better than he himself is on certain attributes and together the reporting team could be better than the leader. This awareness amongst the subordinates develops based on individual and team successes and group collaboration. A leader who is always out to prove that he is superior to his team would hardly give credit to his team for successes. A leader who is always attempting to prove his superiority over his colleagues ends up using his positional power to achieve this, given the fact that he may not be intellectually superior on all counts. There are several negative consequences of a leader competing with his team.

Firstly, the team becomes acquiescent, if not obsequious, denying the organization the benefit of collective wisdom. Secondly, it places too much power in the hands of one individual who has started trading his wisdom to aggrandisement. Thirdly, the broader organization becomes centrally driven diluting the authority and relevance of a whole team of leaders. Two things happen as a result. Potential leaders become blind followers, passive aggressors or take up early exits. By the time the leader and the Board come to realize the folly, mostly through some failures, they would find that the organization has no potential leaders. Eventually, the reputation of the leader as a concentrator of power would inhibit entry of external leadership talent.

Joker(s) in the pack

Though not very apt, the leadership team can be seen as a pack of cards utilized by the leader to win the game of business competition, majorly through skill but partly also through luck. As we know, the joker card which has no sequential or set attribute has enormous value to be used as any card to make a set or sequence. Leaders tend to have a team member who is loyal to the core and who fulfils the role of a joker in the pack for the leader. It is not uncommon even in great corporations to have a joker in the leadership pack; they do contribute to forward movement by adding their word (usually at the behest of their leader) to certain solutions desired by the leader. The trouble arises when the leader tends to have too many jokers in the pack.

Like in a card game, too many jokers in the leadership game rob the game of business any competitive strength. A leadership team filled with members of blind loyalty, even with substance, would add little to the long term strength of the company. Very soon there would be no issues to debate and no decisions to make. A leader who fills his pack with too many jokers would find it difficult to reconstitute the deck even if wisdom dawns on him because unlike the competent ones jokers tend to stay on for a lifetime! There is probably only one way to deal with an excess of jokers; offer them sinecure positions and make them lead inconsequential non-mainstream divisions.

Drawing the blinds

A company, more so its headquarters which houses its leadership team, is like a cozy home. It stays in its community (the supply base or the marketplace) but also could be a mini-community by itself. It is important for any house to draw in, from outside, sunshine and breeze so that the residents are healthy. A home may protect its residents but unless residents go out and are able to live their external life they would eventually become weak. The fate of headquarter leadership is also similar. Unless leaders undertake periodic viewing and listening tours in their fields they are likely to be isolated, and lose their touch with competitive pulse. Being blinded to realities is the worst handicap that a leader can inflict upon himself.

The third mistake leaders commit is to draw blinds on their homes, shutting out the view on and feel of outside developments. Artificial light and air conditioning may not only substitute the natural sources and be more comfortable. They may even give a false sense of control over them. They are, however, expensive and inappropriate; like artificial light can never help in vitamin D synthesis in a person as natural sunshine does. A leader who runs a headquarters that is isolated from its environment does more harm than good to the vitality of the leadership team and agility of the company. It is not enough for one or two potential leaders to foray into the environment. There must be continuous openness for all the team members.  

Decoupling with peers

A peer is someone at one’s own level. A leader, if he is hierarchy bound, and in addition has a mistaken feeling of superiority may never see anyone as his peer. It is important for a leader to appreciate that aspirant leaders who are one level below him organizationally, and even managers several levels below, can be peers based on intellectual capabilities. Organizational structures and processes are designed, despite their bureaucratic nature, provide several opportunities to couple with executives, managers and leaders of shared or overlapping processes.

The fourth mistake leaders commit is to decouple themselves from their peers despite organizational opportunities. Decoupling occurs in two ways; one is going through interactions in a mechanical manner and the second is to build silos around himself and allow other leaders to build silos around the divisions they head. Leaders who think of themselves to be superior or carry needless burdens of their weaknesses tend to deliberately decouple themselves from their peers; hierarchial or intellectual. A leader who does deliberate decoupling only downgrades his potential.

Tunnelling the vision

Leaders are charged with a rather sublime duty of conceptualizing a vision. Vision is not a definition of a future business. Vision is more an expression of how a business would build itself and endure over a really long time. Apple’s vision is to lead a digital revolution. Google’s vision is to organize all data to be useful. Microsoft’s vision is to seek diversity and inclusion in its business. Ikea’s vision is to create a better everyday life for people. Amazon’s vision is to be the world’s most customer-centric company. General Electric’s vision is to bring good things to life. Vision, in a way, represents a superordinate philosophy of a company. A leader’s differentiation will be evident in the nature of vision statement.  

  

The fourth mistake of a leader is to tunnel a vision; an oxymoron of sorts. Vision needs to be expansive as open sky horizon and capable of lasting in perpetuity. Expressing a vision in terms of products and businesses is a hallmark characteristics of leaders with tunnel vision. This leadership mistake restrains an organization from absorbing its fundamental purpose and establishing a perpetual connect with its stakeholders. It is not expected that a leader should develop a vision by himself. If the leader does not make the mistakes mentioned earlier he would be in a position to develop his leadership bench, bring out their inner and innate potential, and seek contributions from his team members to develop awesome vision.   

Board role

The role of apex leaders, among many other important things, is to be a model of leadership, and keep organizational processes on track. If the apex leaders, the Chief Executive Officers and other C-Suite Officers, themselves make any or all of the above five mistakes, it is difficult for others in the organization to correct such leaders. As mentioned earlier, the subordinate leaders and managers may just comply or exit. If leaders do not realize the need to avoid the five mistakes, the Board of Directors becomes the only hope.

The Board is the institutional framework that can mentor and coach the apex leaders to live their leadership role in totality, avoiding the above five mistakes. To be able to play that mentoring role, the directors on the board themselves must be seasoned and wise enough to understand the five mistakes that leaders could commit and they themselves should not have committed them. The Board’s role is not just review of performance, or even ensuring governance but is enabling the apex leader to do the right things and avoid mistakes, and reach the fullest potential.

Posted by Dr CB Rao on June 12, 2016

Continuing Education for Employees: Consistent Strength for Organizations

Two things never stand still in life; the first, of course, is time, and the second, less recognized, is knowledge. Knowledge gained through education is the prime ticket for career entry. Thereafter, consummate application of such formal knowledge as well as experiential knowledge gained in one’s career is the key to further progress in career. Industrial and business organizations are paradoxical. At one level, they are at the leading edge of technology. At another level, they tend to stagnate at past levels of knowledge, which is attributed mainly to employees being engaged in repetitive jobs and not being challenged to be at contemporary standards of knowledge.  A study of different companies reveals that those companies which invest in continuing education for their employees tend to be more competitive.

Continuing education even in the best of companies is a misnomer. Usually, it is limited to providing “canned programmes” to a proportion of employees, “allowing” a few employees to pursue formal part-time degree or higher degree programmes, and “sponsoring” even fewer to executive development programmes. Some companies eschew all of these on the basis that there is no substitute for on-the-job-training on a continuing basis. These policies cause a stagnation of skill levels and lead to competitive decline. In some cases, companies which are impacted by competitive decline engage external consultants at an aggressive pace and at great costs to reinvent themselves. In contrast to such uncoordinated efforts, it would be more appropriate to embed continuous learning in organisational culture, with emphasis on contemporaneity and quality rather than just coverage.

Shared responsibility

Continuing education is a shared responsibility of both the company and employees. While the company has a lead responsibility in articulating that it places a premium on knowledge, and following it up with a learning environment, employees also need to consider continuing education as their responsibility too. In fact, continuing education is a very useful platform to align the career possibilities that a company can offer and the career expectations that an employee has. Continuing education helps in that it could derive greater competitiveness through skilled-up employees and be in a position to offer them better opportunities.  For employees it is an opportunity to offer a superior or different value proposition to the company and seek career progression in the same or different track.

The extent to which responsibility for continuing education is felt by company and employees varies based on the business context. Start-ups by definition are innovative and, where required, learn by experimentation; they are likely to have little penchant for continuing education. Growing firms evidently are competitive and successful but also cost conscious; they are likely to adopt a need based approach for continuing education. Mature firms are engaged in defensive strategies and are likely to be open to a skill based approach for continuing education. Declining firms are engaged in survival strategies and are likely to have little time for continuing education. While employees may like to prefer a degree or skill based approach, the company context determines their approach.

Multiple approaches

Companies could adopt one of the three approaches in fulfilling their share of responsibility. The first is a ‘qualification gap’ based approach. In this approach, the company determines an optimal qualification for each role (as contrasted with minimal qualification required for entry) and encourages acquisition of degrees or certifications/accreditations for bridging the gap. The second is a ‘competitiveness gap’ based approach. In this approach, the company maps people competencies to company’s competitiveness and does whatever is required to make the company competitive. The third is an ‘industry leadership’ approach. In this approach, the company believes in a heady mix of superlative qualifications and competitive competencies for a differentiated performance. While most companies would follow the first or second approach, top ranking consulting firms, law firms and investment banking firms appear to be following the third approach.

Employees’ approach to continuing education, by and large, depends on the nature of the company. A technology and research intensive industry will require skills that are typically offered in leading educational institutions. Skills required for other industries may be more easily sourced in the general marketplace. Regardless, in general the approach tends to favour the acquisition of higher formal degrees. Whether employees do it through part time education or by taking a break depends on personal circumstances, company environment as well as career shift that is desired. Research indicates that employees do not consider in-house training as being supportive of career aspirations; they also consider external short term courses as little more than of marginal support for either on the job performance or career shift.

Education as mind-set

The primary objective of industries and businesses is to provide products and services, and not to educate. Similarly the primary objective of industrial and business employees is to put their knowledge to use. To conceive, therefore, of a situation where industries and businesses as well as employees focus only on education is somewhat impractical. However, the need for continuing education as brought out above is critical. The blog post suggests a few mind-set approaches to accomplish the objectives.

Continuous as lifelong

The first is to consider continuous as really meaning lifelong. As a concept, continuous education has lesser emotional connectivity to an individual than lifelong education. Once an individual gets into a mind-set that education is a lifelong, value adding process, he or she will surely develop ownership. Similarly, it focusses to the company that the continuous education initiative would need to be a part of life skill development of an employee. The concept of ‘lifelong’ is humbling as well as futuristic, for both employees and companies.  

Company as campus

Companies take many structural approaches to supporting their versions of continuing education. These include setting up their own in-house technical training centres with pilot equipment for on-hands training and management development centres for development of executive and managerial skills. These, however, tend to be just a part of the company infrastructure and figure more as slots in training calendar. The compelling proposition, on the other hand, is to consider the company as a campus wherein every piece of equipment, every bit of procedure and every interaction with a person provides learning opportunities.  

Individual as learner

While the company has a lead responsibility to provide a learning ecosystem, it is for and up to the individual to mould himself or herself as a perpetual learner. Being a learner does not make one a novice; only the insecure would feel that way. Being a learner and asking questions should never be seen as infra dig by employees or management. Wise scientists learn from every reaction of an experiment, wise operators from every rhythm of their equipment, and wise executives learn from every interaction they have in the company.

Learning processes

When we think of learning processes, things like classrooms, flip boards, audio-visuals, presentations, course materials etc., come to mind usually. Some think of off-site events and programmes as great learning opportunities. However, all these are at best accessories and aids to the learning processes. The real learning, that too perpetual learning, happens through the following personal approaches.

Listen, observe, absorb

In keeping with the prime responsibility on the individual to learn, the prime responsibility for learning approach also shall be that of the individual. It is fairly simple too. For a perfect learning process, the individual must listen intently, observe closely and absorb earnestly. These processes must take place in all interactions, peer to peer or boss to subordinate. In several cases, there could be learning opportunities from the younger reporting staff too. Learning environment is usually an expressive and empowering environment.

Follow, emulate, excel

The objective of learning is to excel in performance. This is usually preceded by two fundamental stages of following and emulating. Following is the process of merely implementing the learnings as absorbed. It is task oriented learning, putting into effect the ‘know-how’ learnt. Emulation is the process of thinking and acting like the person providing learning inputs; it is mastery of both ‘know-how’ and ‘know-why’. Excelling is the process of creative thinking and execution based on the learnings imparted/ received. Excelling is the result of empowered learning.    

    

Teach, share, coach

Everyone has a responsibility to disseminate learnings as much as they absorb. This again occurs through a three stage process. Most people who are well-versed in their art tend to teach. Those who teach prepare their learners only for ‘know-how’. A few others not only teach but also share their thinking around the subject matter of interest. Such people help the learners absorb both the ‘know-how’ and ‘know-why’. A few go beyond both the stages and truly coach the learners overcome their issues and limitations, and become what they can truly become.

The winning twelve

This blog post has reviewed the ticker of continuing education that most organizations would like to carry, and proposed that it should be considered more as lifelong education. It has reviewed current shared responsibilities between a company and its employees, and noted that while a company has the lead responsibility to create a learning ecosystem the prime responsibility for learning must be that of an individual. It has considered the multiple approaches currently adopted and postulated that they serve to accessorize rather than elevate continuing education as a lifelong journey.

The blog post proposed twelve elements of a lifelong learning journey. On one plane is a true learning platform that embeds the concept of lifelong learning, with perpetually learning individuals considering the entire company as their learning campus. It also proposes an easy and feasible multi-step process to learn through listening, observing and absorbing to be able to follow, emulate and eventually excel. It legislates that those with superior knowledge must endeavour to teach, share and coach all the time. Lifelong learning is a humbling feeling and a rewarding experience. It is a win-win for both employees and organizations.

Posted by Dr CB Rao on May 18, 2016  

     

Digital Democracy: Decisive and Doable?

Elections are a costly, gruelling and time consuming process in any country. Yet, India has been ahead of developed and developing nations in holding countless elections nation-wide, and keeping democracy alive and vibrant. The just concluded elections in certain States of India is one more endorsement of this tremendous capability in India. India’s Election Commission, and other constitutional, governmental and political structures and systems deserve a lot of credit for the election engine that the country has fine-tuned. While there are many criticisms that things could be better on key factors such as turnout, manifestoes, practices, candidates and accountability, this blog post is not about either those issues or solutions for them as the author believes that there are more competent experts and agencies to communicate and work on it.  The purpose of this blog post is to consider the concept of elections in a broader perspective and in a digital context.

Election is a mandated right of all citizens in a democracy of expressing, individually and confidentially through a structured process, their considered opinion on performance and potential of a ruling dispensation. It is, in a sense, applicable to every forum, organization or entity where a few leaders govern the rest of the members based on either agendas or promises. Every organization must start appreciating the election process for what it means to people and introspect as to why they do not integrate the good points in their structures and systems. The several theories in management literature on feedback, accountability and leadership styles do not come anywhere near providing a meaningful template for embedding the power and relevance of a formal election process, in a manner contextually relevant for organizations. Despite huge progress on digital technologies and social media, most organizations are yet to work on, let alone realize, this promise.  

Democracy matters?

The fundamental principle of extending an electoral process into an organization is that democratic and inclusive feedback is an important aspect of competent management and leadership processes. There are arguments for and against it, which are based on the perceived behaviour of members.  The author would like to call these Theory X and Theory Y of Organizational Democracy (OD). For ease of reference, we will use the nomenclature XOD and YOD, respectively.

XOD runs on the following behavioural assumptions of members, all of them in negative interpretation of employee mind-sets and capabilities:

• Given a choice, a typical employee prefers to avoid responsibility rather than accept it.
• Not all employees are equally knowledgeable and responsible to opine constructively.
• Averaging equally expressed opinions misguides managers like the average depth of a river does.
• A leader’s job is to govern based on structured plans rather than unstructured feedback.
• Grassroots feedback places undue power in the hands of those whose job is to follow directions.

YOD runs on the following behavioural assumptions of members, all of them positive about the ability of employees to fulfil higher responsibilities:

• Given a choice, a typical employee accepts responsibility rather than avoid it.
• Irrespective of knowledge, employees will be constructive and responsible for progress.
• Collective opinions provide a powerful guidance on organizational health and strength.
• A leader can reinforce his plans, however thought out they are, with employee feedback.
• Grassroots feedback empowers those who execute with participative ownership.

YOD assumptions clearly are more positive and have the potential to energize an organization towards a positive culture.

Digital deficiency

Most organizations are well equipped digitally. They have evolved information technology departments. Every organization has an intranet which is open to its members. People have regular access to computers, tablets and smartphones as well as wifi and cellular data services. People attend meetings with their devices invariably in toe, or mostly utilizing them. The digital infrastructure is designed and operated typically as a one-way path from the management to employees rather than the other way. Required information which makes a member more knowledgeable and competent is provided through the intranet: messages from leaders, codes of conduct, organizational policies, standard operating procedures, training materials, team accomplishments, and so on. It is rare, however, to see the available digital infrastructure being utilized for equitable two way communication.

Intranet invariably identifies responses and feedback with persons. Unless the feedback process is entrusted to a third party surveyor like Survey Monkey, it is quite possible that confidentiality is compromised and people will be reluctant to provide candid feedback. If leaders and managers accept the YOD assumptions, and members have self-worth to be confident and self-disciplined to be constructive, an organization’s digital highways and intranet portals can be effectively utilized to collect analyse feedback on a 360 degree basis. Some of the issues of leadership conduct encountered in certain non-governmental agencies and autonomous entities would have been discovered and evaluated in time with digital democracy in such organizations. As with any transformative exercise, the change for a culture of digital democracy and honest feedback can begin with a few small steps. 

Experimental steps

There could be several small experimental steps to usher in organizational democracy. For example, as one logs into his or her computer system, the administrator could ask a set of five simple questions: what do you set out to do today, how motivated you are to carry out your taks today, how supportive is your leader expected to be, how confident you are with your team today, and how happy you are with your organization in the overall today. These are pretty universally applicable questions that would fit any business or operational context and any level. These can be expressed in the past tense as day-end questions on the computer before one logs out. Participation in the questionnaire could be made mandatory by making login and logout impossible unless these questions are answered.

These five questions help the company answer the following central themes: goal focus, self-motivation, leader support, team alignment and organizational morale. If each organization can find a way to encrypt these responses one would feel more confident to provide candid and authentic feedback. An organization and business savvy data analytics group can pick up important perceptions and suggestions from the feedback. While daily responses may not be conclusive, the management will certainly get to know what is trending. As the organization tastes success and builds confidence, questions can become more specific to issues, businesses, projects and people. Over time, digital democratic highways become great instruments of widespread organizational participation and ownership.

Governance

Digital feedback is especially useful in promoting corporate governance. Monthly executive leadership committees, usually headed by the CEO of the company, and quarterly board of directors meetings, usually headed by the chairman of the company, are the key institutions that facilitate and influence governance. It would be great if at the beginning of the respective meetings, there could be a digital feedback session `which asks certain key questions: how prepared are you in addressing today’s agenda issues, how collaborative the team has been internally to discuss cross-functional issues prior to the meeting, how supportive you expect the CEO to be with respect to your key concerns, how confident you are with your team on execution, and how happy you are with the overall direction of the organization. 

In respect of board meetings the key questions could be: how informative the company has been in preparing the directors for board meeting, how prepared the directors have been for the board meeting, whether sufficient time has been accorded for discussions for all topics, whether all directors have had a chance to express themselves, whether the board committees have fulfilled their roles, whether there is satisfaction on the strategic direction and execution of the company, and how happy one is to serve on the board of the company. At the end of the meeting, the same questions can be asked in the past tense with appropriate changes, for the executive committees as well as the boards. Taken together, the entry and exit polls would enhance the members’ awareness of their and the company’s conduct in furtherance of the company’s and their aspirations.

Leader elections

The higher step in an organizational setting would be to usher in total organizational democracy through the digital means. Every leader may, in such a system, have both the right and responsibility to seek feedback from the members. Would such a radical system wherein leaders are elected by subordinates lead to loss of authority to execute? Would it force leaders to downplay people performance issues and reward members irrespective of performance just for leaders to stay in position? The answers to these questions may depend on the level of maturity in an organization, and the periodicity with which such leadership elections are held. There could also be other less disruptive or threatening options to the classical organizational hierarchy and power system, such as a collegium system of leadership selection. However, as typically, intellectuals are involved in organizations responsive and responsible electoral systems are probably better.

The ultimate step in a virtuous digital democracy is to elect national representatives through digital processes, anytime it is required. Though difficult to imagine now, a few decades down the road, wifi may be so pervasive that instantaneous digital elections through smart devices may indeed be possible. A more practical and intermediate step would be to create a huge national governance portal, in all national languages, wherein citizens can post their likes and dislikes, convey their issues and seek solutions, and provide feedback and ideas. With the biometric based Aadhar gaining ground and newer end-to-end encryption technologies emerging, it should be possible to ensure authenticity in the digital feedback. A huge data analytics infrastructure would, no doubt, be required to support this but it must be viewed in the perspectives of generating its own higher level employment and organizations, society and nation, creating higher value through better leadership and citizenry with mutual accountability.   

Posted by Dr CB Rao on May 17, 2016

A Theory of Business Relationships: Five Principles for Success and Sustainability

Relationship is at the core of social evolution. Relationship is the way in which two or more people or things are connected with each other. While relationships are usually interpreted in terms of family ties and friendly moorings, relationships extend far beyond family cocoons or friendship circles. In a broader perspective, relationship is the way in which two or more people or groups regard and behave towards each other.  Many such relationships that are beyond the family system are experienced by us; for example, the teacher-student relationship, the doctor-patient relationship, the employer-employee relationship, the landlord-tenant relationship, the people-government relationship, the buyer-seller relationship, the multiple stakeholder relationships, and so on. In fact, virtually everyone has a relationship with someone else he or she deals with, in one way or the other.

At the very basic level, awareness of one another results in just a cognitive relationship. As it evolves into an acquaintance, a reciprocating relationship develops. Reciprocation could just be in the form of exchange of greetings or could extend to exchange of information or other material factors. While one could experience hundreds of reciprocal relationships, only a few would evolve into sustainable relationships. For a relationship to be sustainable, the relationship must traverse through three stages. The first is rapport, the second is credibility and the third is trust. Rapport exists when two people or agencies have a close and harmonious relationship, understanding each other’s feelings and ideas, and communicating well. Credibility exists when one stands convincing, believable and capable of fulfilling the promise, in a consistent manner. Repeated demonstration of credibility leads to a firm belief in the truth, reliability and ability of someone or something. Trust has, in most cases, a material fiduciary responsibility and accountability.

Business relationships

Business relations are varied; from one-off casual interactions to legally binding business contracts, there are many ways in which business relations evolve. Some are business to business (B2B) while some are business to consumer (B2C). There are others like business to government which are legal and regulatory, and certain others such as business to society that are more qualitative and abstract. Whatever be the nature of relationship, the three step process defined above, and comprising ‘rapport, credibility and trust’ is a must. Even in respect of one-off transactional relationships, the process builds value for the present or for the future. Business managements have traditionally seen financial ownership and/or commercial partnership, with legal structuring, as the predominant basis to form and protect relationships, but there is more to it.

Relationships are also subject to competitive dynamics. Exclusive dealerships have, in the past, been the preferred relationships for sales and marketing. Over a period, multi-brand dealerships have started appearing (whether in the same dealer format or co-owned dealer format). Simultaneously, companies started setting up their own selling plazas (for example, Maruti Nexa). Just as social relationships are disturbed by dynamics of families and friends, business relations are also disturbed by competitive dynamics. Any amount of legal mandating may not help when competitive dynamics disturb. These influences could be for cost and price advantages or growth compulsions. These could also be due to lack of relationship between the people who manage the relationships.

Interpersonal complexities

Business relationships are far more complex than usually imagined. It is not as simple as measuring performance or profits as generally thought to be. Each business relation is, in fact, a complex maze of interpersonal relationships.  There are three such principal complexities.

The first is generational complexity. When first set up, later managed or eventually terminated, it is people who interpret and endorse or negate a business relationship. A business relationship has four distinct phases; commercial discovery, legal templating, operational performance, and performance review. All the phases are carried out by individuals on either side of the relationship. As individuals change, not only the dynamics change but the initial perspectives tend to get lost.

The second is horizontal complexity. Although a transaction is fulfilled at one end of a business value chain the actual utility could be far out in the value chain. A typical example is a vendor relationship which could impact manufacturing. If persons leading or operating at different points of value chain cannot communicate holistically and meaningfully, even simple performance issues could lead to enormous noise in the system and destabilize relationships.

The third is vertical complexity. Certain business relationships are initiated, structured and signed off at the top between senior leaders, and handed over to operating teams below to execute. While the jobs may be handed down, the perspectives and the subtleties may never be cascaded down. In certain other cases, a business relationship may be established at the operating level but could come to the notice of, and review by, senior leaders at a later stage. The juniors may not be able to explain appropriately, or even lack the strategic approach the senior leadership now takes. This could also create noise in the system.  

Given that business relationships are built on interpersonal foundations, the need for a systemic yet a people oriented approach to business relationships is self-evident. Five principles for successful and sustainable business relationships are discussed below.

Five principles

There are five principles of trustworthy and trusting business relationships that can be built with interpersonal trust model. 

Strategic

Not every business relationship is, or needs to be, made at the CEO or CXO levels. Consistent with the nature of business relationship, the highest leader must, however, be involved. A new green field expansion by a component supplier needs certainly CEO to CEO partnership. However, an arrangement for housekeeping will not require such intervention; yet, within the boundary at least the functional managers must be involved from either side. The involvement of senior managers and leaders helps in the avoidance of ‘penny-wise and pound-foolish’ approaches and instead focus on long term value creation. Involvement of strategic leaders ensures that operating executives are not threatened by self-perceived need to save the pennies at the cost of long term value.   

Risk based

All relations aim at rewards. It would be fallacious, however, to assume that there are risk-free approaches to business relationships. The more novel a business relationship is, the risk profile could be higher even as its competitive advantage could be higher. If the relation follows a beaten or established path, it suffers from another type of risk of eroding margins. No amount of legally binding contractual language can identify and provide for all current and future risks. Interpersonal rapport, credibility and trust help in addressing risk professionally. One may have a perfectly collaborative relationship with a competitor (like Apple and Samsung have) when the risk and reward tracks are not intermixed, and respective leaders are allowed to deal with competitive and collaborative aspects separately.

Stage-gated

Business relationships should not be founded on expectations of immediate miraculous results. Adequate time should be allowed for operational teams to strike rapport, prove credibility and establish trust. Leaders have a particular responsibility in selecting lead managers who have positive interpersonal approaches and sound fundamentals. Many times, conceptually sound partnerships flounder due to cantankerous managers who are self-obsessed rather than focused on mutual value creation. If the first stage of rapport does not take place, the sponsor-leaders have a responsibility to either counsel the lead managers or replace them with more harmonious ones. Similarly, if credibility is not established with repetitive consistent performance, the processes must be relooked.  Normally, a quarter of rapport building and another quarter of credibility establishment, at the maximum, may be allowed to assess the precursors to trust. And, transparency is the key to assessment of trust.

Transparency

Transparency starts from the initiation of a business relationship. Mature leaders realize that placing mutual expectations, strengths, weaknesses and resource capabilities on discussion table help establish the fundamental rules of transparency in a business relationship. Many do not realize that understanding the weaknesses of partners helps build greater strengths in the relationship as a whole. For example, when an Indian outsourcing partner does not have global sourcing strength, and discloses that weakness upfront the sponsoring client would be able to leverage its own global sourcing network to meet the gaps.   This transparency may cost the outsourcing partner a pricing advantage, and the sponsoring company an overhead burden but will provide to both greater business value. Transparency helps in win-win alliances as well as in developing trust to handle risks and share rewards equitably.

Codification

There are two ways to handle interpersonal complexities, whether generational, horizontal or vertical. One way is to have the same people handle the business relation, longitudinally in time, horizontally in value chain, and vertically in hierarchy. In this case, institutionalized knowledge and practice keeps building on established relationships. However, ‘people-perpetuity’ is hardly possible. People have to be moved in and out of positions, and careers; and even if they stay static, changes in business environment with new competitive dynamics induce changes in people. The only insulation can be through codification of perspectives, processes and expectations with which a relationship is set up, and the implicit and explicit value from the relationship. Partnership codification must be a living document, enriched with progressive setbacks and accomplishments.

Partnership as relationship

Partnership, in a legal meaning, is an association between persons or entities which involves pooling of all resources and sharing of all assets and liabilities, usually in the ratio in which respective resources are brought in by the parties. Partnership, in practice, is the consummate form of a relationship which brings in the concepts of sharing equally and equitably. Relationship is a generic way of two entities connecting with each other while partnership is a customized definition of equitable relationship. Partnership signifies a shared future. There are times when partnership itself has to move an even more sublime relationship.

Partnerships are challenged when one of the partners is beset by serious business troubles for extended periods of time. Imagine the relationship between a truck maker who makes only trucks and is hit by recession and a component maker who caters to all types of automobiles, some of them growing in demand. If the component maker agrees to price reductions to support the truck maker and stays on through the cycle of recession collaboratively without shifting capacity, it goes beyond partnership; it will be companionship. Strange it may seem in a hardnosed business context, companionship is the sublime form of business relationship, as in personal relationships.

Posted by Dr CB Rao on May 14, 2016        

A Business Leader’s Soliloquy: When Management Jargon Becomes Communication Bandwagon!

People need language to communicate. Over time, management experts have developed a unique business language; one interesting, it has now become annoying.  It helps communicate something odd about them, rather than help them communicate evenly with their colleagues. This business language comprises several phrases and epithets which have achieved a cult status in managerial and leadership circles. Strangely, this language is not affected either by gender nor generation. It is pretty universal. Developed once upon a time (but not so long ago) for impact, much of the business language has become cliché-like, annoying jargon. Not to be deterred, self-appointed masters of business communication continue to revel in its use; and some are sworn to it. Here is one such soliloquy!

As I wake up each morning, peeping out of the window, I remind myself of my high-flying penchant for blue sky thinking. Sure, I will be aided by my consultants landing today with their own helicopter view of affairs here. While they may urge me to do some out of the box thinking, I will demonstrate to them how I can pick low hanging fruits by myself ahead of their developing a strategic staircase. As I take shower, I do get my idea showers too. I realize my team does not have the required bandwidth but I consider it my responsibility to cascade all my ideas and create core competencies in my team. Surely, I will run up the flagpole a couple of my ideas and see whether they would help me square the circle!

Thinking of teams, I would like to get all my ducks in a row but with the kind of team I have, I am as dead as a duck in facing the competition. I tell my Human Resources (HR) team members repeatedly to look under the bonnet but they hardly are able to move the needle on this. Going forward, I need to synergize with my HR head so that we can get to the table the best talent, but I am unable to get my message over the wall even with him. I am unhappy that instead of running with this concept my team keeps moving the goal posts. At this rate zero revenue will not be a ballpark figure for my next budget. I need to induct some really best of breed talent to achieve a paradigm shift in our thinking and performance.

Indeed, I touched base with my CEO about this troubling situation. Instead of facing the issue squarely, he dropped the ball when he said that we should take this offline. Much as I want to take to the next level my team’s performance, pushing the envelope, here is my CEO who is not even reactive, let alone be proactive. People think that he and I are joined at the hip, and that I have a lot of face-time with him; but this episode shows our convergent divergence! I am not going to be put off by this; I am going to hit the ground running, putting the pedal to the metal. I want to give my 110 % to my leadership role. I know that our company is debt laden; all the more reason why I should leverage my intellectual capital. That is a win-win paradigm for boundless synergy of intellectual finance, signifying deep-bonding of equity capital with bank debt. I know all our stakeholders will be thrilled with the ROI all this will entail!

I am one who would like to drill down, in fact, deep drill down, on issues, benchmark against competition and crystallise solutions. Some team members may play hardball but I have enough support to bulldoze them. I want that every one of my team members should sing from the same hymn sheet but I know that there some who don’t still get that I am results driven. I have decided to bite the bullet and take such people out of the loop. After all, what can be a greater party than all of my team members toeing the party line? The bottom line of my management is that when the push comes to shove I will not be hesitant to look at the one throat to choke. Actually, that is the million dollar question!

Each day, from my 30 thousand feet perspective, I look for the ideas that have got legs, with the hope that even if I can’t sprint to my goal posts, at least my ideas will! I know I do not have enough boots on ground but it is all about synergising and leveraging available guys so that we can do more with less. I am not a micro-manager but I have a hands-on style; I would like to put a record on, and see who dances. I view my people in buckets; performers and non-performers; mind you, I do believe in incentivizing performers. In all this performance appraisal process, however, I don’t wish to wait the whole year as it is not good to let the grass grow too long under me.

I want to engage with my people as they are my moving, and also removable, assets. Every day is a new beginning for me with them, and I treat every issue as a new horizon. I believe in root and branch review that helps me with hits and misses. I am not married to my team irrespective of performance; actually I believe in asynchronous engagement and conscious uncoupling, as far as employee relations are concerned. I am issue-focused, data-driven and results-oriented, with a stage-gated approach. You see, I am a visionary, and whenever my team members struggle to keep pace with me, I encourage them to do some white space thinking, and try to cross the chasm to reach me.

It is not that I don’t encounter failures; every time we fail (as is usual most of the times!), we go back and sharpen our pencils – so much so that on most occasions we have no pencils left! That said, I know how to manage the optics of failure. I believe in disruptive technologies, and creative destruction, with a fuzzy vision as a highway of growth. I know it is radical philosophy and there are not many who can step up to the plate with the leadership USP I have. I believe in kicking up a perfect storm, every now and then. That’s my formula for a balanced ecosystem, whatever it means. I don’t like people who keep saying that it is not our core competency or that we should stick to our knitting. You see, heart of heart, I believe I am a one-off leader. I take a ready-aim-fire approach to problems.

Long back I worked in a food corporation where I was told silos are very important (to store foodgrains, of course!). Now, in this organization, breaking silos is my thematic template and cultural anchor. I don’t mind sounding like a broken record here (about breaking silos, that is!). I keep telling my people – business is all about building value not building silos! Having failed in that I coined a new organizational mantra – bridging the silos! We do face some headwinds there but I am an eternal optimist; it is all a question of seeing the glass half full or half empty! Transparency is always the big elephant in our meeting rooms. At the end of the day, we as leaders need to walk the talk; if there is no talk how can we walk? I wear two hats, therefore, one that of an optimist, seeing a door where there is a wall, as I said earlier, and the other that of a pessimist – seeing a wall when there is a door!

I would like our meetings to be fun at work! I want to keep an open door system and I don’t want hard stops but I can’t help being time-titrated as I am busy like a bee. As we take up each problem, I want to peel back all the layers of the onion. I wish to go granular in analysing problems and be scalable in providing solutions. I want my team to be chained to the concept of value chain, on a holistic basis. I want my people to be intrapreneurs. I admit that my tenure has seen more problems than solutions but that’s how irony of life is! My job is managing the paradoxes. I rely on my 80-20 rule to action on the right issue. Of course, I have my 2 cents of opinion on every issue but I need to manage expectations that I can provide solutions to problems, with white board and zero base approaches. I want to keep everyone in loop and circle back even when I miss my meetings. At times, I feel that I have too many chefs in the meeting room. I honestly want to do a level-set of my team every now and then.

I am the boss but I am a team player. I don’t want my people thrown under the bus. Yet, I carry too much on my shoulders, but mind you, my team members seem to have a chip on the shoulders that they are the victims. I feel I am actually the victim here! Probably, I am used to drinking from the fire hose! I keep telling my people to put our game faces on but there are not many who are ready for the game. They don’t realize that business is all about basic blocking and tackling. I try to inspire people by talking about the next big thing. I like calibrating me against myself! Comparing me with anyone else is certainly not an apple to apple comparison (of course, I am the apple)! Someone said that it is impossible for my team to study me; he asked, after all, is it possible to boil an ocean?

I am a firm believer that we should be more focussed on go-to-market and first-to-market strategies each day, rather than be preoccupied with go-to-home and quick-to-home habits. I want to be customer-focused and technology driven.  For that I look for bleeding edge technologies; leading edge ones are passe’ to me. I believe firmly that Sunset industries require Sunrise technologies. Technology gets us a greater mind-share from our customers. And with some tailwinds in business, we can do great. I want my team to get its arms around the technology animal. I know that technology is just one aspect, and that there are lots of moving parts in business management, but technology is the burning platform for most companies, including mine. Sure, technology strategy requires crystal ball gazing but I punt heavily on my capabilities in this. By way of housekeeping, I keep a laundry list of all the potential growth triggers, though. I may sound immodest but I would like to be called technology evangelist.

I have decided to solution-architect my organization to meet the challenge. I have the ‘D’ and ‘R’ for this as the leader. First of all, I will deploy horses for courses, keeping technology and business separate. I will create a SWAT team to identify the technology direction, and a Tiger Team to actually source the technologies. I will establish a swim line of communication. I will go for high-impact technologies and reach out to every director to support. I want my firm to have its own silicon valley even as it grasps every external window of opportunity. But at the same time, I do not wish to reinvent the wheel.  If after all this, there is no buy-in from anyone, so be it; it is what it is! I want my organization move from good to great. If needed, I will right-size it but I will also get next-gen people and practices. I know it is not plug and play but I think I can have an energising effect, and electrifying impact for empowering people. This is my big challenge and this is where the rubber meets the road!

I keep telling my people that if they are able to wrap their heads around my challenge and colour outsides the lines, they should do not be keeping their ideas in the parking lot. I am eager to monetize their inputs with my delivery. I will never make my employees out-of-pocket with me, I assure them. Still, I am unclear why they do not appreciate that I am putting a stake in the ground here. If only they are aligned with me, my performance can indeed go viral! I just need a few quick wins. It is no brainer, really. I am not clear why my people do not appreciate my game-plan. I thought my communication is always so crystal-clear!!!

Posted by Dr CB Rao on May 13, 2016