On the Competition Highway: The Perspectives of Two Bahns

Business highway is a theoretical concept of businesses traveling over time towards their destinations on certain pathways. While each company has its own goals, more often than not several companies, constituting an industry, tend to travel together along the same business highway. The reasons are simple: every company in an industry faces the same huge market that appears bountiful on the distant horizon and every company has only a defined set of prime movers to take them towards the destination. The nuances we speak of in terms of product positioning, market segmentation and so on are efforts to define motels and hotels on the highway to rest in the quest for market dominance. Those who take their rest as the endpoint in journey risk becoming marginal players in a subset of the large market.

When a company starts as a monopoly, the cruise seems to be smooth and unchallenged. Companies take their time to build up speed, and after certain periods of acceleration and deceleration, could stay on their chosen speed level.  In certain industrial situations of perfect duopoly, two players tend to travel together in a certain equilibrium without upsetting each other unduly. In most industrial situations, however, competition starts coming up. Dots in the rear view mirror become, new speeding competitive businesses zipping past the monopoly or the duopoly businesses. Academic gurus and practical leaders dedicate their lifetime understanding the dynamics of competition and developing constructs to stay ahead of competition. The fallacy in competitive strategy is that everyone has the same access to theories of competitive strategy and can operate in similar ways to meet their strategic objectives. Much like automobiles, businesses drive through rear view and front view.

Rear view

The essence of rear view in driving is to be watchful about vehicles overtaking us. The rear view strategy in business also works much the same way. As in safe driving, it requires the driver to focus largely on the way ahead while casting darting glances at the rear view mirrors. Each car has two rear view mirrors; the right one near the driver (in right hand drive vehicles) is the primary one to be watchful about overtaking vehicles (competitors, in a business context). The left side rear view mirror is helpful to be watchful of those who seek to overtake from the wrong lane and also help the driver assess how he is pulling ahead of competition as he overtakes. To make effective use of the rear view mirrors and not to be blind to relative speeds, it is important, without doubt, for the driver not to have glaucoma (and for businessmen not to have tunnel vision).

The highway cruise is a game of lead and lag. Over time, drivers in autobahns learn to maintain a distance in equilibrium or get used to an iterative lead and lag in disciplined lanes. They also confirm to lane discipline, by and large. While the destination remains the goal, the preoccupation of the driver’s mind is in preserving a competitive but collectively safe ecosystem. The leads and lags do help in arriving at the goals but miss the larger picture of if one is on the right lane. In business too, when one is preoccupied with competitive leads and lags, the businessmen tend to lose track of the broader picture. Much attention is paid on watching the rear view to take care of the zooming competition, and ensuring the lead. Business race is not one in which a few market share points matter (as seconds matter in a car race). What matters more is an unfettered view of the spaces ahead for businesses to continue racing ahead.  

  

Front view

It goes without saying that the front view is far more critical than rear view in driving. The purpose of front view is to seek a clear road, be mindful of signages, and avoid safety risks. In business too, front view ride is critical but cannot be curtailed like in road cruise. It is important to look far ahead and visualize the path. Verdant spaces to drive in are important. The trap, however, is that business managements very quickly convert the long term visions (strategies) into short run journeys (budgets), and become watchful drivers. Agility, if at all, is shown in overtaking the vehicle (business) in front rather than in considering a quantum jump to a distant destination. As with rear view, soon the drivers in front view too get into a comfortable equilibrium with the road ecosystem.

Many times, the best of views is disrupted by inclement environment; while the vehicle or business may have the best of navigation aids, prudence demands slowing down till the weather clears up. A road warrior understands the physical limitations of an inclement environment but a business warrior takes really a long time to feel the impact. All of these do not matter as much in a crowded bumper to bumper traffic condition or in a fragmented industry environment because speed is controlled by default. That said, it would be somewhat facile to assume that a leader who is well tuned to disciplined yet agile driving on the road would be equally so in a business highway. On the contrary, there are critical differences in how leaders conduct themselves in the two bahns of roads and businesses.

Two bahns

While both automobile travels and business travels are physical, the latter gives a vicarious feeling of virtual state. As a result, the business leaders who drive on the business highway tend to be far more freewheeling than the driver on autobahn. The results in an autobahn are instantaneous and physically experienced, whether positive or negative. In business bahn, however, the results take time to deliver and the careless driver is insulated from the likely impact. This fundamental difference makes well-groomed and disciplined leaders to be casual, careless and even undisciplined on a business bahn. Leaders who would be deeply aghast at liberties taken in physical driving would not only wink at liberties taken nonchalantly on business bahn but also be unmindful of the damage being inflicted on the business ecosystem. Leadership exhortations such as ‘making one’s own path’ can be easily twisted out of perspective to go berserk on business highway. Unfortunately, the impact of reckless driving on business highways gets known only after the drive is nearing to a serious crash.

A vehicle needs fuel to cruise on the autobahn. The faster you drive and the longer you drive the greater is the fuel consumption. The best bet lies in having a vehicle with a larger fuel tank and better fuel consumption; such an envelope only postpones the limitations but never eliminates them or avoids the need for refuelling. Like automobiles, businesses need the fuel of profits to run; so does everyone believe. In reality, businesses need cash to run. Profits are virtual fuel, an accounting fuel in a manner of speaking, that lets businesses keep on running despite losses (and even cash losses) through a variety of props of diverse financial instruments. It is important that businesses appreciate the importance of cash as the only fuel that can sustain deviant or careless drive on business highway. The processes of management have put in place a number of checks to ensure appropriate governance (much like speed governors, ABS and safety checks) but the way bankruptcies and stressed assets blow up in India and elsewhere indicate that the drives on business highways need a different perspective for future.

Autonomous driving

The automobile industry, nay the road transportation sector, is set to be transformed with the experimentation and eventual maturation of autonomous driving. An autonomous car (also driverless car, self-driving car or robotic car) is a vehicle that is capable of sensing its environment and navigating without human input.  Autonomous vehicles detect the surroundings through radar, lidar, GPS, odometry, computer vision and soon with artificial intelligence. They are equipped with advanced systems that interpret sensory information (including reading signages) and navigate the paths towards destinations, overcoming obstacles. What this implies is that man-machine interface through breaking systems, speed governors and safety devices is considered inferior to a completely machine controlled drive. Autonomous driving is both a tantalizing misnomer and a perfect descriptor, in parts. Conceptually, giving an automobile complete autonomy from the free thinking human being is considered to lead to better navigation, safety and efficiency for the vehicle and its passengers (besides accommodating one additional person in place of the driver)!

Well for businesses too, all the wisdom from the stakeholders to advocate prudential norms and all the efforts from the regulators to put in place governance standards are akin to the meters and governors, with all their bells and whistles, embedded by the designers to enable smooth and safe functioning of an automobile in the hands of its driver. Just as these have been found wanting and autonomous driving is the new goal for safe autobahns it appears that businesses that are algorithmically driven and are autonomous from the inducements, aberrations and compulsions of human enterprise could be the new norm for safe driving on business bahns. Conceptually, a machine controlled business would appear to be completely antithetical to the idea of free enterprise but with the strides being made in artificial intelligence businesses may be run faster and safer as well as more profitably and more prudentially by machine controlled algorithms! The advantages could lie in terms of better regulated investments and expenditures with greater business assurance!!

Posted by Dr CB Rao on June 3, 2016

Multi-factorial Planning: Tricky Paradox or Timely Paradigm?

There is a general view that the greater the level of planning the greater could be the success of execution. Experts feel that Indian executives and firms plan less and aspire more as well as evaluate less and execute more, causing firms to be burdened with infeasible targets and unviable plans. Experts also propose Japan as the ultimate model of planning-controlled-execution and USA as a balanced model of planning-optimised-execution.  It is a moot point whether adopting of either Japanese or American model of business management would lead India to achieve better execution. That said, there are several perspectives of planning and execution that have emerged from global and Indian practice that are worthy of notice. Prior to moving forward on the topic, it is useful to consider what planning entails.

Planning typically requires data on the past, expectations on future, awareness of firm strengths and weaknesses as well as environmental opportunities and risks, analytical framework and a few other related inputs. Planning influences, and is influenced by, the length of the value chain. By nature, planning has deterministic ends but iterative processes. It is difficult to separate planning and execution. By and large, planning is considered a staff function while execution a line function. While planning is considered the starting point and governing platform of execution, planning is also considered to be a seasonal activity to be carried out by lean-staff at best. The question then is whether planning should remain a seasonal or continuous exercise, and in either case with narrow or broad participation. This post discusses some relevant issues and proposes a few contrarian thoughts as well.

Planning is disruptive

One of the paradoxical aspects of planning is that it is as much an enabler as it is an inhibitor. Without planning, goals cannot be established, strategies cannot be developed and execution cannot be effected. However, based on the inputs that are factored in, planning can also be inhibitory in nature. Given the current scenario of lead times in infrastructure and long gestation of projects, planning is essential to mitigate risks. At the same time, factoring in of the current delayed implementation of infrastructure projects can inhibit the very launch of a project. Planning tends to regulate as well as disrupt one’s thinking. If one asks a professional planner for advice on a new business venture, one would be inundated with more questions than answers. The questions can start from multiple business definitions to myriad aspirations that could be set. Executives must learn to use planning as a controlled accelerator rather than as a disruptive decelerator.  

Planning is not aspiration

Many confuse aspiration to be a goal or even a plan. One aspiration for a firm, for example, could be that the firm would launch all products successful in one market in all the balance global markets as well. This, however, is no more than an inspirational thought that could galvanize the organization into a new futuristic path. Believing in the aspiration as a goal could, however, lead the firm to a series of non-prioritized helter-skelter initiatives across the globe which the organization could fail to support. Structured prioritization coupled with a continuous reality check helps tame the aspirations to feasible and viable plans. The founders and CEOs have a major role to play in this moderation as they tend to be the primary customers for unbridled aspirations, and many times themselves the generators of mammoth aspirations, in organizations. Planning would be optimal when planners are blessed with creativity to dream but also accountability to aspirations.

Analysis is debilitating

Planning tends to be full of data points. For someone planning investments, the data points could include returns over the last several years of various asset classes, performance of individual funds, expected economic growth of domestic and foreign countries, likely expenditure profile of the investor, likely and emergency healthcare requirements and so on. Neither can all the data be captured nor can the analysis be mounted, let alone perfected. Notwithstanding the rise of big data analytics, it becomes impossible to factor in all relevant data points in a manner that they can complement human judgement which is so essential. Typically, deployment of larger than required planning formats tend to be highly debilitating to purposeful forward thinking.

Planning is visualization

Nothing can be farther from truth than to imagine that planning is best made only on paper or computer. In fact, the best plans of consummate planners are first visualized, and then only perfected on paper or computer. A consummate planner (all professional planners not being consummate planners!) has deep knowledge of the subject, and understands what it takes to achieve a goal. As a result of this deeply embedded knowledge, the consummate planner tends to get all the components of a plan in a visual framework in his mind. A consummate planner who is charged with the mission of producing a million smart phones as a green field project can visualize the site, factory and organization infrastructure as well as R&D, manufacturing and R&D value chain along with financial needs. This visualization leads to a healthy debate between the planner and the promoter on what is doable and not doable, and leads to a more purposeful and more relevant planning.

Planning is iterative

The most challenging part of planning is that a plan will always be a sum of moving parts. There could be changes even before the ink on the paper dries, euphemistically speaking. The answer to this challenge does not lie in either abdicating the planning process or getting overwhelmed by continuous analysis. The answer lies in being open to changes all the time. The best planning template would comprise a solid and stable core but flexible and adaptive peripherals. As an example, planned development of new expressway should always be firm on the alignment and lane sizing but should be flexible on development of social and industrial infrastructure alongside the expressway. A demand and revenue maximizing model for the peripherals would de-risk the core and keep the project on track. Reverting to the smart phone project, one could make a choice as to which of the three critical value drivers, viz., design, manufacturing and marketing (but not all the three) would be the solid core and which would be considered for total outsourcing, joint development or leveraged development.   

Planning is organizing

Planning and execution may be two sides of a coin but the coin itself is organizing. More than execution, planning is organizing. A plan without elements that cannot be organized cannot be a plan at all. Organizing here refers not only to factor inputs and resources but also to people. It would, for example, be impractical to plan a one lakh employee coding unit in USA when neither local STEM candidate pool nor HB1 visa limits can support the formation of such an organization. It may similarly be audacious to plan an Intel-competing semi-conductor plant in India without organizational clarity on how the technology and material value chain can be built and how people skills can be marshaled. Another rhetorical question, for example, could be whether Make in India would be successful without Skill India. Planning for Make in India must therefore be led by planning and executing for Skill India. A good planner would have a complete understanding not only the business value chain but also the organizational elements.   

Planning is addictive  

If execution is challenging and instantly calibrated by results, planning is addictive and could lead to perpetual procrastination. Professional planners tend to get cocooned with their own plans, and move from one plan to another rather than follow a plan-execute-plan cycle. It is not uncommon for planners who see their plans tripping with poor results plan for higher results rather than identify and resort to corrective actions. This approach is complemented by an executive leadership which hates to be identified with failures. As a result of this tricky combination of compulsive planners and escapist executives, planning tends to become an end in itself in certain firms. It is easy to separate firms which plan only for planning sake from firms which plan with an execution focus. The former survive more by make-believe (though not for far too long) while the latter prosper by value creation.

Timely paradigm

Planning is an essential foundation for building a strong and viable superstructure. However, planners must not lose sight of the ultimate goal of building lasting value on ground as opposed to the easy temptation of scaling up value on paper. To be able to do that, the tricky pitfalls of planning need to be avoided by resorting to a smart platform of planning interlaced with execution. The paradigm works with a leadership that integrates planning and execution, and looks at planning and execution on an end-to-end basis. The paradigm involves drawing up plans with a long term horizon, ensuring a solid core and flexible externalities. The leadership must watch not only how others are executing but also how others are planning. Korea succeeds not merely because of their speed in execution but more essentially because of their productivity in planning. An integrated paradigm of timely planning and speedy execution tends to be industry leading, and globally competitive.

Posted by Dr CB Rao on April 12, 2016   

Hollywood’s Sequel Saga: Ten Dramatic Lessons for Firms

On June 12, 2015, Jurassic World would hit theatres worldwide, marking yet another potentially blockbuster sequel in Hollywood’s glorious history. There is a high level of expectation that Jurassic World would set new benchmarks in projecting an unseen dangerous reptile world. The number of sequels that Hollywood has been witness to are many. Some noted sequel sagas are: Terminator, Transformer, Star Wars, Die Hard, Bourne, Matrix, Planet of the Apes, Lord of the Rings, Harry Potter, Mission: Impossible, Aliens, Elm Street, Underworld, Wall Street, Hunger Games, X-Men, Men in Black, Mummy, Toy Story, Thor, Fast and Furious, Rocky, Lethal Weapon, Rambo, Batman, Superman, Pirates of the Caribbean, Shrek, Rush Hour, Mad Max, Godzilla – the list seems to be endless. And, of course, there is the unending spy series on James Bond which continues to weave its magic decades after the first Bond movie, and even twenty five Bond movies and seven Bonds (actors) later!

It is interesting that the Hollywood sequel saga endured even if some of the sequels failed to be of the same standing or as successful as the original. Such setbacks never deterred the Hollywood Moguls from embarking on sequels, each one bigger and better than the respective predecessor.     As the movie buffs would recount, whatever be the genre, the sequels always had a set of factors in common: unlimited scale, unstoppable action, unimaginable visuals, and more importantly, unceasing entertainment, all with increasing brand equity and increasing expectations. The creativity of Hollywood seems to have no limits or endpoints, given the number of sequels each central theme or central actor had given rise to. It is also interesting that the churn in the ownership of movie studios and production houses has not in any way dampened the spirit of sequels. Though not obvious, there is something to learn from the Hollywood sequel saga for the corporate firms and the professionals who shape the firms. 

Industrialization

Industrialization predates movie making by several decades. Actually, without products of industrialization such as cameras, lights, film and projectors, movie making would not have originated and developed as an industry in its own. That does not, however, mean that the core of what movie making seeks to provide, namely entertainment cannot be provided through non-industrial means. The stage dramas of yesteryears and the street plays of current years are proof enough that both entertainment and education can be provided through simple and direct human interaction and interplay. Industrialization, like it did for every other activity, has, however, dramatically transformed how movies can be made and viewed in theatres, and in addition spawned several auxiliary and substitutive industries such as viewing through televisions, compact discs and now through the Internet and computers/mobiles.

Industrialization, as is commonly experienced, seeks to constantly develop new products and services for newer functionalities. A new product tends to make the previous product obsolete eventually, if not immediately, even if the basic functionality does get only morphed but not rendered obsolete. Industrialization is nothing but the sum total of the persistence and progress of individual firms. The role of individual firms, and the professionals, in industrialization that constantly seeks to develop new products to supersede older ones is a practical expediency. Put in another way, the movie industry’s persistence and success with sequels is a fascinating contrast to how firms seek to survive and grow. While firms do launch successive generations of products, they do not have the magic of sequels that movies have. This is because several firms compete to launch multiple products with the same functionality while each movie has its unique emotional mix for the viewers. That is not the whole story, however.

Movie magic

Viewed philosophically, all movies, save some art and niche movies, are made to entertain. Thousands of movies are thus filmed to satisfy one single objective but manage to be different. Compared to that, firms become frustrated at the first sign of competition and crave for differentiation. There lies the magic of movies, and more so of movie sequels. If one is able to decode the magic of movies in general, and that of sequels in particular, there could be valuable lessons for conventional firms. This blog post tries to identify ten relevant factors through the discussion below; first on movies in general and later on sequels, in particular.

Singular purpose

Movies may differ widely, both in thematic content and in the movie formula; yet all movies have only one singular purpose of entertaining the viewers. Firms may take a leaf out of this. The fundamental purpose of any product is not fulfilling its functionality; rather, it is making users happy! Once firms have this clarity the entire value chain of such firms get defined and operated accordingly. 

Continuous stream

Movies are made with no particular sense of timing. Essentially a creative art, movie making is fired by the spark of spontaneity. Unlike products which are clustered around events (motor shows, equipment shows or electronics shows, for example) or seasons (summer and winter, for example), movies are made almost like an eternal stream. They are made with different timelines and get released when ready, and in no particular pre-designed competition with any other movie.  

Standard pricing

This is one aspect in which a movie makes a radical departure from any other product. Whatever be the movie, for a given theatre, the price of viewing or entertainment experience is just the same. Just because a movie is made with a mega budget it cannot have a higher ticket price. The revenue and profitability is purely dependent on achieving the maximum reach and repeat viewership. This is in marked contrast to firms deriving higher specifications and quality from higher investments and therefore demanding differential pricing for products. The egalitarian pricing requirement is not merely a great leveller for customer access but also a great motivator for product superiority.  

Many hues

The magic of movies is that the ‘common’ looks ‘uncommon’ in the hands of the movie makers. The same nature looks different in myriad hues depending on the film director and the cinematographer. The same ragas are mixed to develop new tunes by the music maker. In contrast, firms try desperately to juggle around a few factors (metal, glass, plastic and polycarbonate, for example) instead of achieving multiple hues on those factors. Bringing creativity for better use of available factors is a lesson firms that could be well learnt from movie making.

Unknown demand

Firms typically look for defined customer demand before developing a product. In respect of a movie, the requirement (except the generic requirement of entertainment) is never pre-defined by the viewer sample or universe. Professionals who look for all sorts of assurances before embarking on their product development may take a leaf out of movie making; the uncanny ability to fulfil a purpose which is not quantifiable but may only be intuitively imagined by the developer!

End as beginning

Professionals despairing at product failures and industrialists dejected at business failures need to get inspired at how sequels are made with both passion and gumption. Sequels demonstrate that any end is artificial and every end can be a new beginning with the right creativity. It is the same park and similar reptiles but Jurassic World promises to be excitingly different from Jurassic Park. Rather than belabour the hostile product-market waters, professionals and businessmen must look at better and bigger sequels to start with the end but undo the past of desperation and dejection, if any.

Thematic core

The success of the original as well as the sequels lies in a strong thematic core. All the sequels listed in the beginning of this post have a unique thematic core built in a pioneering way; some, truly exotic and esoteric like Star Wars and some, primal and thrilling like Jurassic Park. Successful products like BlackBerry, iPhones and Windows had strong thematic cores (communication security, mass media and business documentation, respectively, for example). The skill for these firms lies, as do sequels do, in keeping the thematic core vibrant and contemporary. Otherwise, there would be no scope for a product or service sequel, unfortunately!  

Emotional connect   

Every endeavour, be it a blockbuster movie or a successful product, would have a few factors that appeal to the experiencing people (not customers, per se). It could be the exciting opening and signature tune of a James Bond movie or the do-good action of a Batman franchise. The ability to build on those factors of emotional connect and enrich them further ensured the success of the sequels. Every product or service to be long lasting (not merely as a successful one-timer) needs an emotional connect. Once an emotional connect is developed and nurtured it would become an overarching hallmark.

Creative technology

Movie sequels are often seen as triumphs of technology rather than as providers of fresh new entertainment. That probably is not true. Higher technology (especially superior graphics and dazzling visual effects) are no doubt deployed to take the sequels to higher levels but it is the movie director’s creativity that calls upon such an exalted role for technology. High-tech movies are invariably products of highly creative film makers. In contrast, firms and professionals tend to be cautious in deployment of higher technology, often setting limits through investment caps and returns arithmetic. Here again, firms have a lesson to take from sequels.

Reliving demand

As we noted earlier, unlike physical products, movies have demand and yet have no demand. They are an addictive habit as an option for entertainment. To hypothesize, a priori, that sequels would have a natural assured demand is a doubly wrong hypothesis, therefore. Yet, sequels are successful in rejuvenating and reframing demand. There are not many products that last through a whole span of civilization. One may think of the Indian saree as one product that stayed conservative as well as contemporary; handcrafted as well as technology driven over the ages. Creatively thought and executed, more products may well last through ages.

Mission: Impossible?

‘Mission: Impossible’ is one of the success stories of Hollywood sequel sagas. Just as the movie makers and the actors as well as technicians of sequels make the ‘Mission Impossible’ of each sequel a ‘Mission Possible’, firms and professionals in the day to day businesses and product-market spaces ought to adopt certain principles that underlie successful movie and sequel making that can keep themselves and the products or services long lasting. To recall, the ten principles are as follows.

Firstly, there must be only one singular purpose of business: to make the users happy and contended.  Secondly, new developments should be a continuous process; neither timed to competition not timed to seasons. Thirdly, developments should be made with the rigour of a standard sticker price; efforts must be to recover higher investments through expanded reach and repeat purchases. Fourthly, firms must develop the available designs and materials in many capabilities and elegances, rather than look for unique ones each time. Fifthly, firms must have the conviction and passion for an intuitively felt demand.  

The next six principles which come on top of the five earlier principles are specifically derived from the sequels saga. Sixthly, a good product, like a good movie, need not have an end; each end can be a new beginning. Seventhly, there must be an enduring theme in each product or service that is rather ageless. Eighthly, emotional connect builds a long lasting relationship between the firms and their stakeholders, especially the users. Ninthly, the more creative a firm or a professional is the higher can be the level of technology that can be marshalled; lack of creativity at firm level would be an impediment to deployment of technology even if technology were to be available. And, tenthly, the ultimate challenge lies in rejuvenating a satisfied demand.

Just as time progresses and never ends, firms and professionalism must move on, and live on to perpetuity. Amidst the dramatic entertainment of Hollywood sequels there are many lessons for such an approach as discussed herein.

Posted by Dr CB Rao on May 31, 2015

The Absolute Power of Relative Silence: A Simple Sensory Model of Connected Leadership

Leadership has attracted, and continues to attract, huge interest. Every time a leader speaks or acts, there are possibilities of a new “leadership” “thought” or “claim” emerging. When Bill Gates, the founder of Microsoft, addressed a letter to Microsoft a couple of days ago on the occasion of the fortieth anniversary of Microsoft (Bill Gates and Paul Allen founded Microsoft on April 4, 1975), there were expectations of new leadership hints, bridging his past and current roles at Microsoft and the current and future roles at Bill and Melinda Gates Foundation, his current philanthropic preoccupation. Bill Gates, however, only made a succinct review of how he and Paul Allen started Microsoft with the initial bold goal of a computer on every desk and in every home and the role played by Microsoft in the revolutionary transformation of the computing scene over the last four decades (with its operating system). He also said that what matters most now is what Microsoft does next in terms of making the power of technology accessible to everyone, and every device.

There are instances like Microsoft (and Apple, Sony, Toyota, Ford, Infosys and several other corporations) where the growth of an idea from a small start-up to a large institution reflects leadership by and of its own. Importantly, in all such cases, the founders remain at the helm, at least till the firms reach their respective critical scale and scope. Thereafter, it is left to their scions or professionals to continue to steer the corporation in the manners they deem fit. In such cases, the styles tend to be differently effective despite varying leadership attributes but also take one of the three approaches: (i) be somewhat non-adaptive to the emerging environmental changes (as was the case with Steve Ballmer who succeeded Bill Gates), (ii) be proactively adaptive to craft a role in the changing environment (as seems to be the case with Satya Nadella who succeeded Steve Ballmer), or (iii) be creatively different in building on the legacy of the great founders (as seems to be the case with Tim Cook who succeed Steve Jobs, after his untimely demise).

Impatient, inaccurate

Clearly, growth of great institutions offers great leadership lessons. Academic leadership gurus, however, have their own leadership theories which are force-fitted on to existing visible institutional leadership successes. Such theories and models talk of leadership styles (participative, facilitative, authoritarian, transactional, transformative etc.,) and leadership competencies (visionary, strategic, interpersonal, communication, decision making, risk taking etc.,). There is no evidence of leaders during their active and transformational phases of their leadership roles taking time to sit with academic researchers to define their specific institutional leadership styles. While leaders like Jack Welsh may have been very articulate about their leadership styles while in harness, the motivations for that seem to be developing in terms of developing personalized leadership and mentoring businesses thereafter. Biographical studies also seem to be off mark in distilling and describing the true leadership styles.

Biographical renderings can provide valuable insights provided they are thoroughly researched by the biographer, deeply collaborated by the leader and his peers, and evidentially corroborated by events and developments. If not, they can be misleading and in the case of multiple biographies of the same leader even controversial and contradictory in parts. For example, the authorized version, titled ‘Steve Jobs’ by Walter Isaacson which was published in 2011, after Jobs’ demise is criticized by Apple executives as not being representative of Steve while the more recent follow-on unauthorized version, titled ‘Becoming Steve Jobs’ by Brent Schlender and Rick Tetzeli published in 2015 won praise of Apple executives for being authentic. Amidst the impatience and inaccuracy, the opportunity for capturing helpful leadership insights and developing a leadership model based on proven institutional track record remains unfulfilled. Part of the reason could be because the deep leadership knowledge of a successful leader could be a source of competitive advantage of the firm, which cannot be disclosed prematurely. It could also be that true leaders recognize the collective institutional nature of leadership, and refrain from individualizing it to themselves.

Connected leadership

Leadership is all about staying connected - with all the stakeholders (employees, investors, vendors, governments, public included) and in multiple ways (physical, virtual, direct, diplomatic, objective, emotional, and so on). Being connected is an essential component of communication, collaboration, coaching and influencing. Different leaders have different ways of getting connected - from reaching out to getting reached out to. The different competencies that leaders possess enable them connect to their constituencies in different ways of such a connection spectrum. I have in an earlier blogpost titled “Five Great Indian Leaders: One Singular Leadership Ethic”, Strategy Musings, January 23, 2011 discussed how multifarious leadership competencies are fused under the quintessential Indian leadership model of intellect-driven work ethic (http://cbrao2008.blogspot.in/2011/01/five-great-indian-leaders-one-singular.html). Reviewing the blogpost again after a gap of four years and also studying further works on Indian and global leaders, I am of the view that staying connected is an important aspect of high calibre leadership.

Competencies play a major part in staying connected. Those leaders with high competencies, of which ability to stay humble is one, tend to reach out and be reached out to. In her convocation address at IIM Calcutta, Indra Nooyi, Chairperson of global food and beverage giant Pepsico attributed her being in the CEO position to being in a state of perpetual learning and to staying connected to her parental roots. She also advocated giving back to society even as one learns and earns. Giving back to stakeholders takes different forms depending on how close or distant they are to the leaders. Among all stakeholders, employees are the most important ones for leaders to connect with.  While there are different ways of connecting, including through platforms offered by communications specialists, the leadership connection especially to or with employees, occurs through day to day leadership interactions. While social and emotional connect is increasingly recognized as being as important as technical or professional connection, this blog post proposes a sensory connection platform to serve as a distinctive leadership model.

Sensory leadership model

For accomplished leaders, interpersonal connection in organizations, of which leadership connection is an important one, takes place through the six sensory functions of a human being, in a somewhat metaphorical sense. These are the six powers of sight, speech, hearing, smell, taste and touch by which a living being exchanges information with the world around. While these may not be applicable to life as a leader in an identical manner, they play a notable role with subtle variations of interpretation. The six point sensory postulates for a connected leadership model may be defined as below.

Look around but observe sharp

An ability to see is the most important human faculty even though the other sensory functions are also very important. For successful leaders, the ability to see is accompanied by a keenness to observe. Observation brings care and watchfulness to the rather normal ability to see. From the ability to read body language of others in meetings and interactions to the wisdom to sight a risk or an opportunity in the world, the power of observation can help make a leader truly perceptive. This is one of the founding planks of a leader’s ability to envision a new future state as well as improve the current state.  

Talk less but mean more 

Great leaders are effective communicators. Effective communication is not a function of the oratory level or time as is commonly understood; rather it is one that is thematic, purposeful and meaningful to the audience, and the task at hand. Effective communicators, over time, develop the ability to convey a message beyond what words may purport to. At one level, this is a function of the cumulative connect a leader has with the team; at another level it is also a function of the mastery over subject, the sincerity of purpose and the empathy with the audience that a leader demonstrates, almost as his or her second nature.

Hear well but listen intense

Everyone may have the ability to hear but only a few would have the habit of really listening. Hearing is the process of receiving sound through the ear. It could, at its worst, be just a mechanical process of interpreting vibrations of eardrum into sounds and words. Listening, on the other hand, is the process of hearing with care and a preparedness to register the message, and act on it after due processing. Listening is an interpersonal skill required for good communication and collaboration. At leadership level, where knowledge and experience as well as position and power result in a certain level of presumptuousness on the part of leaders, listening skills could make all the difference between an empathetic and responsive leader and an indifferent and desultory leader.   

Smell a whiff, ahead of the fragrance

Developments in the organization or in the environment are never definitive while in the making. Perceptive leaders are able to detect the early signs as they waft through. These could be as simple as internal employees gradually failing to greet each other in an organization or external agencies taking longer to appraise a project put forth by the organization. Successful leaders are adept at understanding the socio-economic changes before they become trends and then turn on into movements. This requires that leaders have good social sensitivity, emotional intelligence and economic aptitude, regardless of their functional specializations. Leaders in emerging technologies and businesses as also in cyclical businesses must have this early recognition faculty.

Taste the sample to savour the universe

An organizational ecosystem or an environmental envelope is a huge canvas which can never be tracked or understood in its entirety. The head of a conglomerate, or even a large specialized business, would not be able to evaluate the effectiveness of strategies until they are fully implemented; waiting until then would be too late. An ability to define meaningful pilot projects or undertake sampling dipsticks to assess likely total strategic effectiveness is an essential component of successful strategic implementations. Regional product launches, segmented change projects, specific leadership evaluations, and laboratory/field simulations are some of the methods to assess whether planned universal strategies would be actually successful.

Lead the mind but touch the heart

Organizations need logical and rational thoughts and actions to be effective. Leaders must develop plans and execute actions that stand the test of logic and rationality. In short, leaders must lead through mind. Yet, there are matters of organization where appeal to heart is equally essential. In aspects of business turnaround which call for sacrifices for better times, in matters of leadership transformations which disturb stable networks and in phases of start-up with natural uncertainty leaders need to appeal to the heart for teams to stay together and scale all difficulties. Teams in mountaineering and other expeditions overcome most challenging conditions through emotional bonding as much as through professional skill.

Relative silence, absolute power

Bill Gates has been relatively silent for over 7 years since he gave up formal executive leadership of Microsoft in 2008. Steve Ballmer, who succeeded him as the executive head, is known for his thumping leadership style. Satya Nadella, on the contrary, was not known to be anything other than a quiet protagonist of the cloud platform. Yet, a quiet Satya Nadella could seamlessly take over from a dramatic Steve Ballmer, and also steer a significant directional change. Bill Gates’ simple letter continues to have its solid impact. While leadership cannot be totally silent and uncommunicative, in most cases, rather than self-proclamations three aspects communicate leadership – firstly, results speak for themselves; secondly, institutions stand as expressive legacies; and thirdly, processes provide communicative continuums. Successful leaders, and even powerful leaders, tend to be relatively silent, rather than banal, about their leadership.

While relative silence, as an intriguing but appropriate leadership trait, has powerful value, the mystery of what real and practical leadership is all about needs to be decoded. This can happen only when leaders, at the peaks of their success as well as at the nadirs of their failure speak up openly, in dialogue with management experts, academic researchers and objective biographers, on the drivers of success and failure. Those who are reluctant to open up for reasons of either humility or competitive risk should keep making leadership notes on a periodic basis which can be opened up at appropriate times. Only then the disproportionate cacophony generated by limited leadership theories can be replaced by more meaningful, realistic and authentic leadership models. This blog post has discussed a model of connected sensory leadership where power flows from silence and simplicity, relatively speaking! More such theories can emerge from open and shared leadership notes.

Posted by Dr CB Rao on March 11, 2015   

ECOLOGI Model of Organizational Behaviour: Towards Sustainable Growth with Equity, of any Entity!

Organizational Behaviour is one of the most used and researched topic in the theory and practice of management. Organizational Behaviour (or, “OB” as it is popularly referred to) is the study of human behaviour in organizational settings including the interface of human beings among themselves, the interface of human beings with their and other external organizations, and the behaviour of organizations themselves. From the time of Barnard, C I (1938), experiments and theories of OB have spawned management literature. OB as has traditionally been understood includes all of the terms now treated as separate topics or subjects such as motivation, leadership, decision making, productivity, culture, competency building, team building and job satisfaction. OB has seen several management stalwarts such as Elton Mayo, Douglas McGregor, Frederick Herzberg, Rensis Likert, and Peter Drucker, to recall just a few names.

While segmented theories of organization such as business policy, strategic management, competitive strategy, core competence, lean and several others have served to focus on specific aspects of management and leadership, they are more focussed on business organizations, and also  do not offer a holistic solution for organizational vitality. It is important that OB is brought back to its prime position as a total solution for enhancing organizational vibrancy of any entity, not just business organizations. This must also be accompanied by a generic prescription that is enduring for all kinds of business contexts (from growth to turnaround, for example), administrative settings (urban or rural), and hierarchies (apex level or bottom of the pyramid). A healthy and positive OB will enable individuals and organizations achieve relentless growth with unquestionable equity. This blog post proposes a unique organizational behaviour model with the acronym of ECOLOGI.

ECOLOGI defined

Enterprise, Collaboration, Organizing, Learning, Objectivity, Galvanizing and Implementation are the seven components of the ECOLOGI model. If employees, including managers and leaders, are able to appreciate and absorb the full import of the ECOLOGI model and follow it in their day to day working, they would be institutionalizing a vibrant organizational behaviour.  These components are discussed below.

Enterprise

Enterprise is the ability to think of new projects or new ways of doing things and make them successful. It is the ability to demonstrate initiative to succeed. For a vibrant organizational behaviour, the culture of an entity should promote enterprising behaviour on the part of every employee. Certain companies such as DuPont and 3M have made enterprise an integral part of employee DNA. While all employees may not display the same level of enterprise at the time of recruitment, a culture of empowerment and enablement would help employees discover and develop the spark of enterprise in them. To foster enterprise, Japanese companies have made daily team meetings an integral part of their work routine and Kaizen (continuous improvement) an essential part of their thought culture. While the Japanese employees are known to be highly disciplined and logically conformist, they are not lacking in any way in demonstrating new ways of doing things. 

   

Collaboration

Collaboration is the essence of human living. Even at just an individual level, collaboration between the body and mind is essential for healthy and positive living. Within the body itself, there must be collaboration between different limbs while within the brain, there must be collaboration between left brain and right brain! It is self-evident, therefore, that collaboration between different individuals is essential for an organization to progress successfully. The culture of challenge, competitiveness and even conflict advocated by certain theorists and practitioners is patently inferior to the positive energy and bonding that would be generated by a collaborative work culture. As with enterprise, collaboration must be fostered from the time an employee is on-boarded into an organization.

Organizing

Organizing, in the context of ECOLOGI model, does not refer to the creation of the physical structure of an entity (and most certainly, it does not refer even remotely refer to an organization chart). Organizing is the ability to plan for, and arrange for, something to happen. From organizing one’s thoughts to organizing the resources required and the activities to be performed is a critical capability of an individual. Organizing has to be the core competence of every employee, not merely that of a manager or a leader. The ability to organize matures and mellows for an individual with experience. The moment a task is thought of, the individual with due thought and experience can visualize the whole spectrum of activities to be performed. While skillsets such as program management are now promoted as a discrete discipline, every employee has the right and responsibility to be organized.

Learning

Learning is a lifelong activity. The fundamental requirement for learning is neither intelligence nor teaching; it is receptivity! Learning helps one develop knowledge and skills that are required to meet current business or administrative requirements. Organizational ecosystems must be particularly designed to promote learning as a continuous activity. While encouraging employees to learn, learning disabilities (beyond lack of receptivity) that could be acting as barriers to learning need to be identified. Every learning and development programme must have a learning effectiveness check at the end of the programme. It should be conducted by an independent, confidential on-the-spot survey at the time of conclusion of the programme and followed up with another similar survey three to six months after return to the regular work.

Objectivity

Objectivity is the ability to judge and decide on any issue or a person based on facts and without getting influenced by personal or others’ influences and biases. Basing on facts does not mean that emotional aspects are ignored. If consensual decision making is a part of a country culture, objectivity requires that such manifestation is integrated into the evaluation and decision processes. Objectivity is not simply lack of subjectivity; it requires a quest for factual data and information. These accrue through not special studies but simply through perceptive observation. For objectivity to be a hallmark of organizational behaviour, organizations must promote discerning and discriminating capabilities in individuals. This can be developed with simulation exercises and role play for employees under the guidance of experienced managers and leaders.

Galvanizing

Galvanizing is the ability of a person (usually a leader or manager) to excite others to take concerted and inspired action to achieve a goal. The most profound example of galvanization is that of Mahatma Gandhi galvanizing all of India into a relentless nonviolent movement for independence. While such examples are legendary rarities, it is required for every individual, not limited to managers and leaders, to galvanize co-employees into collaborative actions. It is also possible for employees of lower rank to galvanize employees of higher rank through demonstrable example-setting. Leadership has a strong component of galvanizing but the ability to galvanize and willingness to be galvanized for objective causes is an important aspect of positive organizational behaviour.

Implementation

Implementation is the end result of all of the six attributes talked about so far. To be execution-focused and delivery-focused is the critical attribute of winning organizations. Aggressive implementation has been one of the principal reasons for Korean manufacturers to steal a march over the intrinsically more innovative Japanese manufacturers. In good organizational behaviour, implementation is the responsibility not merely of frontline employees but that of all team members, including managers and leaders. Implementation at times requires innovative mind-sets. The global success of Indian information technology companies has been attributed to the development of a global delivery model. India’s new credo of “Make in India” clearly requires excellent implementation capability, backed by all the other six ECOLOGI facets.   

Holistic ECOLOGI

To be fully beneficial, the ECOLOGI model has to be absorbed and followed in its totality throughout the organization. Each component of the ECOLOGI model is mutually reinforcing with the others. In one important sense, ECOLOGI model of organizational behaviour ensures a positive ecological balance in the organizational ecosystem!  Enterprise, for example, is not necessarily a genetically acquired attribute; it is developed through collaboration that gives mutual reinforcement and also from learning which opens up one’s mind and hands to new knowledge and skills. Enterprising people are essential to galvanizing others, and also to be galvanized. Implementation is the logical endpoint of galvanizing. Enterprise also helps people overcome any obstacles that are encountered in organizing. Organizing and collaborating are essential factors for successful implementation.

Among the seven dimensions of ECOLOGI, objectivity is a key value-based objective. To be tactically influenced by one’s own biases or others’ opinions is a common human failing. It requires certain core values for a person to be completely objective in all aspects of functioning. Objectivity, however, is a behavioural value worth inculcating. The ability to galvanize others into action depends to a large extent on how objective the individual or leader is known to be. Objectivity is also a key driver of successful external stakeholder relationships. Objective leaders tend to evoke respect of even competing firms.  Given that ECOLOGI is a holistic experience, individuals must devise their means of scaling themselves on each of the dimensions to achieve high levels uniformly. Any entity which follows the ECOLOGI model would have a positive and virtuous organizational behaviour that ensures competitiveness in commercial business or administrative service. More importantly, as an aggregate impact it would ensure sustainable growth with equity for India as a vibrant nation.

Posted by Dr CB Rao on March 29, 2015