Category Archives: Business

I Screwed Up: 10 Lessons in leadership


President Obama Delivers Address On Immigration Reform In Las Vegas, Nevada( He may be down and out for the moment after the defeat in the “ fall” elections of November . But US President Barack Obama, visiting India over the next few days has challenged conventional leadership
models.)

This article is from a contribution made by the author to the journal of the Delhi School of Economics, published in August 2010.

I woke up one morning to the best quote, and what was finally the winner of the sound byte of the year 2009. US President Barack Obama , not once, but several times confessed on national television that “I screwed up” , with reference to his nomination of Tom Daschle , Health Secretary who unfortunately ended up being a tax violator. Shoddy due diligence, but it happens. What was truly refreshing though , like driving down a deserted Marine Drive at 3 am in the morning, was his straight- from -the- heart brutal transparency. No pretentions! No justifications! No shrouded in calibrated jargon! I am sure the conservative Republicans cried foul at the usage of the slang term with a sexual connotation, but Obama was  ‘cool

But this is Obama’s second staccato-fire. His first was absolutely brilliant, when he termed the financial jack-asses ( the erstwhile over-rated over paid investment bankers of Waterfall Street ) as “shameful” for pocketing million dollar bonuses even as long-term investors went bankrupt, families got wiped out, and the world plunged in The Great Recession . And that too from the bail-out funds from government charity and tax-payers money! What a monumental repugnant act of self-aggrandisement ! It took a honest, bold and a true leader to condemn the preposterous day-light robbery by these flaky fools in pin-striped suits chewing on Cuban cigars, to set the record straight. And while these thick-skinned financial racketeers are collectively protesting, Obama has gone and done the hitherto unthinkable; he has put a cap on their disproportionate salary levels, thus ensuring no subterfuge methods of compensation. Now that’s what you call a real leader; he does the right thing, fearlessly, and without blinking an eyelid.

For Corporate India there some lessons to be learnt from both Obama ( I confess to having initially welcomed him with guarded circumspection and restrained enthusiasm, as I found the hype claustrophobic ) and the home-grown Ramalingam “Satyam” Raju story. Paradoxically enough, even Raju ultimately did say “I screwed up” without choosing the same colorful vocabulary but that was after he had sowed the seeds of India’s Himalayan financial catastrophe .

So instead of giving you blue-blooded, business school sanctified , sacrosanct gyans ( that is the rare prerogative of foreign – educated esteemed Board Members of some IT companies) , let me give you simple down to earth learning from some of the most momentous experiences of recent times:

1. BE BRUTALLY HONEST

Cut the crap! The world is short on patience and verbal jingoism, and playing silly hide and seek games in the corporate boardroom and press conferences. If you have done great work , please do shout from the roof-tops. If you haven’t, don’t sack your PR firm either ( unless you cannot afford them ) . Speak up, even if from the ground floor whose rentals are now on your piling payables. Disclose, disclose and disclose, and do so without fear.

2. SIZE DOES NOT MATTER

Companies have this mindless obsession for being the biggest and all that; it is a fruitless endeavour. Everyone wants to be on a LIST of sorts, and size seems the common denominator of CEO obsession. As the collapse of financial behemoths and others such as AIG , Citibank, Merrill Lynch, GM, Ford , Satyam prove, ultimately their size became their undoing. Sure enough cheap funding can create big scale, but what happens to the key task of managing those multi-product, geographically spread , cross-cultural and complex structures when they are simultaneously challenged? Even Tata Motors defaulted on paying suppliers, and we are not even shocked anymore. And despite the pink papers massaging egos of their advertisers by repeatedly showcasing them , please stop taking those Forbes billionaire lists too seriously. Focus on customers and quality; size will follow almost logically.

3. WHAT’S THE BIG DEAL ABOUT A ” QUARTER”?

One of the principal reasons why many companies are floundering is because of this self-created pressures of providing Dalal Street a well-spread buffet meal every three months , a staple high calorie, deep fried meal . Companies I think are meant to exist for the long-term, and sometimes projections do go haywire, and unexpected shocks are inevitable. It’s not the end of the world if your stock price slumps because of short-term profit-bookings or cut-loss operations on account of unreasonable punter expectations. Instead, what you should look for are far-sighted investors, and your own business strategy over a sustainable period. I think CEOs over-react to stock analysts and media pressures. Instead, they should show them the door.

4. CUT OUT ” EXCESSIVE” SOCIAL NETWORKING

There is the new culture in town that tells you that you must be seen in EVERY conceivable networking dinner, corporate party , a ET or BT or FT or TT bash. Dump it! In any case, you meet the same old usual suspects mumbling the same ancient incoherent crap. I am not saying business socializing is not important, it is . It is also the cheapest form of brand-building ( especially in these cost sensitive times) , but if over-done, it results in diminishing returns. Why don’t you spend that saved time in mentoring your future leaders, reading the audit report, just calling on your customers, or maybe just driving home early?

5. TRUST YOUR EMPLOYEES FIRST

Good or bad news—– your employees must know about it before that Mr Patel scratching his head at his Fort office or the journalist from those TV channels. CEOs keep repeating ad nauseam-“My employees are my biggest asset”, but actually treat them like their disposable liabilities. If you can’t take your team into confidence, good or rough news, you should quit, you do not deserve to be there; instead start by giving the pink slip to yourself in a white envelope.

6. CREATE YOUR OWN GOLD STANDARD

We have an obsession with all things alien, western, esoteric, heavy-sounding — we are constantly looking for role models to ape, concepts to implement, buzzwords to crow, fads to follow. It is time we acknowledged that while being adaptive to global ideation is being smart, we are distinctive, and perhaps need to create our own case stories , business models, best practices, and performance standards. As a company, each one can have its own defining values, work culture and management principles. The best benchmark is not your competition, but where you want to be.

These days the giving away of ” Awards” is become a real joke. Essentially it is a brand-building agenda of the host, a sponsored event, which also becomes a revenue generating model, a double-edged sword. It is a farce. Satyam got the Golden Peacock ( poor bird) for corporate governance , for god’s sake? So if you are not a great place to work or truly admired, but only got the award because you filled up the forms with politically correct information before the due date expired, don’t accept it. Instead of becoming a motivational tool, it will be a long rope with which you will end up conjuring some death-defying stunts that may unfortunately succeed. Create your own standards, and reward yourself and your team. You need no external endorsement.

7. INVEST IN ETHICS AND VALUES

In the final analysis, it is your openness, transparency, goodness, the whole set of work values and business ethos that will help you through difficult times. But this must start at the top, leaders must set the pace, practise what they preach and teach ( unlike Enron which had a voluminous book on ethics) , and set exacting standards of fair-play. And don’t get frightened if you made mistakes and “screwed up”, it’s human to do so. Your journey to your destination will not end. The basics usually matter the most, they are the bed-rock of endurance.

ap_obama_presser

8. AVOID THE DEADLY “E” WORDS

Many leaders sink in a cesspool because they get “emotional” about their work-place. “Ego” worsens the situation considerably. It is a deadly toxic combo. The two drive several business barons to unknown limits to either grow, maintain or salvage their enterprise. You know, one can understand the involvement, passion, sweat and toil and tears and all that, but frankly, in the end in business you do not control the outcomes, the environment, the future. It is important to let go, take things dispassionately and not be too harsh on oneself. The world forgets. More importantly, they also forgive. Better still, we move on, with the comfort of the knowledge that one did the best one could. And forget the neighbor’s new car, you may not be aware of his repayment capabilities. Clean and maintain your own jalopy like a black stallion.

9. BE READY FOR THE MOST UNEXPECTED

There are volumes of work and strategies on crisis management, but when it comes to the crux, we are not just caught napping, we are usually comatose. Leaders of The modern Great Recession era ( 2007 – 2009 and still continuing in some places) need to be conservative in their projections, and realistic about its potentiality . Ceteris paribus is good just for micro-economics for higher secondary schools. Risk-assessment is not just to satisfy the audit committee, but to mitigate against unforeseen quirks of nature and some man-manufactured disasters of epic proportions. Essentially, we should not look too stunned when suddenly surprised. It is easier said than done ( which is why I am writing this piece) , but leadership is not everyone’s cup of tea or coffee, my dear friends. In calm waters, everyone is a good captain. When you see an iceberg, the end does not have to be ‘titanic’ .

10. HAVE FUN: LEADERS ARE ALLOWED A LAUGH

I think leaders take themselves too seriously ; they try hard to appear to be constantly engaged, value every second of their time as if the world will stop revolving when they take a loo break, and speak with the gravity reserved for making funeral speeches. Lighten up, folks, it’s all right to crack a smile, you hurt no one in the process. And with or without you, the business will thrive, everyone will come to work, and life will move on. Who knows, the customers may even rejoice, and your employees will break into a salsa ? Frankly if you are not having fun despite the house-car-club-bonus-PR-stocks deal, clearly you have a problem. Remember, he who laughs , lasts.

Start by being honest to yourself; that’s a great first step. Practise saying this before a mirror every day ” I screwed up, I screwed up, I ———“. Because you will. But when you do, you will not be a chicken. You will be a leader.

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The L of Lehman’s leadership


FILE - In this Sept. 15, 2008 file photo, Lehman Brothers world headquarters is shown in New York, the day the 158-year-old investment bank, choked by the credit crisis and falling real estate values, filed for bankruptcy. After weeks of intense focus on the crisis in Syria, the White House is set to use the five-year anniversary of the Lehman Bros. collapse next week to lay claim to an economic turnaround and to press congressional Republicans to not use the threat of a shutdown or a unprecedented debt default to extract a delay of President Barack Obama's signature health care. (AP Photo/Mark Lennihan, file)

“Greed……is good. Greed is right. Greed clarifies, cuts through and captures the essence of the evolutionary spirit—-. Greed—-mark my words—–will save…….the U.S.A.”
Michael Douglas (1944–)
American actor in Oliver Stone’s 1988 motion picture Wall Street

At the moment, Gordon Geckos’, the Wall Street master – brokers’ words are somehow not quite saving the US of A. In fact, there is a salvaging operation on by the free enterprise US government itself, perhaps, marking the first case of reverse nationalisation. Blue-blooded pedigree investment banks such as Bear Stearns, Lehman Brothers and Merrill Lynch have all changed hands with extraordinary alacrity. Mighty institutions have been felled by ingeniously crafted risky mortgage products by creative investment bankers which have now boomeranged. One of the world’s largest insurance and financial behemoths AIG has been forced to take a government bail-out, and even Morgan Stanley and Goldman Sachs are on the verge of a precipitous collapse. Amidst all the brouhaha of financial gluttony, we may have missed the woods for the trees. What does the stumbling, crumbling, collapsing Wall Street drama really imply? It actually reflects —— the failure of leadership. Strangely, the virus of greed affected all the fine gentlemen in black suits and red ties simultaneously. The reverend CEOs perhaps, forgot what their management trainees spend hours learning in five-star classrooms; the risk-reward curve.

The story goes that when Bear Stearns was getting stowed over burning charcoal, Jimmy Cayne, chairman was busy playing bridge, even forgetting his portly mobile phone behind. And that Lehman Brothers chairman and CEO David Fuld was making rosy predictions about his firm’s glossy future to the shrewdest investors of them all, Warren Buffet, fully aware that in reality they had hit insurmountable road-blocks. Numerous investors who got taken for a real ride forgot a simple saying; if stock market analysts were indeed such experts, they would be buying stocks instead of selling advice.

Not so long ago, Kenneth Lay, erstwhile chairman of Enron, once amongst the most highly visible entities in the energy sector, threatened the Indian government with dire consequences if we reneged on the Enron deal in Maharashtra. A head of a multinational Fortune 500 company was threatening a sovereign democratic republic of over a billion people with unambiguous arrogance. A few years later, Enron existed but only on legal documents, and Lay had become an unfortunate victim of trying circumstances. Incidentally, Enron apparently had a 79 page code book of Ethics, and we all know that perhaps, it was just an in-house paperback bestseller.

I remember reading several articles on leadership and ethics, business principles and values around that time, as the USA experienced a series of deadly CEO frauds. Martha Stewart had also made dubious headlines, almost savouring the media spotlight. Even bad publicity is publicity after all. Years later, after the standard pontifications, we can see that nothing really changed. Sure, the current investment banking failures are not regulatory violations or cases of deliberate criminal misconduct. They are , to use common parlance, bad business decisions. But ethics is not just about corruption and violation of existing rules and regulations. What leaders need to understand is that ethics also has to do with one’s priorities, a comprehension of the bigger picture, assessing the likely fall-outs on all stakeholders – customers, investors, shareholders, employees, partners and the industry itself. Blind obsession with quarterly profit projections has ended up creating CEOs with a fuzzy vision, even irreparably blurred.

Newspaper reports say that Lehman Brothers senior team-members in India are being already head-hunted for big jobs with high emoluments; isn’t that a queer irony? But what about the hapless staff in BPOs, the ordinary work-people without the MBA tag, the administrative team, the back-office guys, and the contract labour ?

The collective leadership failure of the blue-chip investment banks is already become part of financial folk-lore and business school case-studies. They say that gentlemen prefer blondes. However, problems arise when they develop a passion for bonds instead. Maybe Wall Street CEOs could take that as a first lesson.

India’s Growth Is Unstoppable


The falling rupee has raised serious concerns about the state of India’s economy. The woes being faced by the Government at the Centre has shaken the global faith in India’s growth story, with FIIs and investors having second thoughts on their investments in the country.

SJ

The Government’s reaffirming commitment towards the nation’s growth story and allaying fears of India staring at an economical and financial crisis, Sanjay Jha, National Spokesperson, Congress (I), spoke on a `A Defining Decade-Why India’s Growth is Unstoppable’ on 22nd August.

Shailesh Vaidya, President, IMC said, “The Indian economy is currently facing tough times. Factors like high social sector spending, a fiscal deficit amounting to 5% of the GDP using the backdrop of the global financial crisis, a farm loan waiver, besides high minimum support prices to farmers, all combined to weaken our fiscal position and stoke food inflation affecting the Aam Aadmi the most.”

Jha exclaimed, “India is a young democracy, vibrant in nature and a radically transformed country. Today India is a part of the global think tank. No international agenda is complete without India on it. And that in itself is a big achievement. The last ten years have seen us opening up sectors like telecom, retail, pharma, education, healthcare and we grew at a time when most economies were languishing during the financial crisis of 2007.”

SJ_1

Admitting to concerns about the falling rupee and its statutory effect on the Indian economy, he added, “The problem of the rupee falling drastically is partly global and partly domestic. The recovery of the US economy is the main reason for the rupee’s woes. Though the US-Euro zone recovery is bad in the short term, it holds lot of promise over the long term. Unemployment rates are declining and the $4 trillion that went into the emerging markets is now finding its way back home. On the domestic front, the gap between imports and exports is widening. Gold and oil imports are critical elements in our import bills, which need to be controlled.”

The other features that are symbolic of the India Growth story with an eye on the hurdles being faced, he said, “India is the third largest country in the world in the Purchasing Power Parity scales. India is in a cycle of change. Our middle class of 350 million people is larger than all of USA. A country that adapts well will succeed in times of crisis. India is a young. It is the thought process and the mind set that defines a nation. India is currently in a paradox. The corporate sector points to a paucity of talent while unemployment rates stay high. The need of the hour here is to maintain a balance in terms of quality by enhancing skills.”

“We are a parliamentarian democracy. The parliament has to function in order to move ahead. Coalition compulsion is a reality. However, the political system has to deliver. It cannot fight at the cost of stepping on the toes of the common man. Corruption needs to be tackled by framing stronger laws. As a citizen, if you want change, you will have to be politically active” said Jha.

Courtesy: www.afternoondc.in

Read More :  http://www.afternoondc.in/epaper/EpaperPost.aspx?id=89906