Aspirations and Realism: Balancing Business Perspective

As everyone has aligned themselves to the realities of downturn and slowdown, as the case might be for different companies, we are setting into some very interesting business times. We have lived in times of crazy growth for a long time. Last three decades or so have been either times of slow stable growth (pre 1991) or high growth (post 2000)…..seldom have we been in times of downfall from existing positions. To that effect none of us have ever gone through such business conditions in our working lifetime in all probabilities. These times will probably teach us some of the most hard hitting and valuable business lessons.

 Some of the lessons many corporate honchos have already started to realize are:

Lesson 1 : Best business plans are those which are made on real business and real market…..anything that’s based on too many complex set of assumptions made in order to reflect geometrical growth, are bound to be high risk prone

Lesson 2 : Best form of profitability is real cash flows….virtual profit booking in ever inflating books  might cause  for some exciting exit options to investors in good times, however in more difficult times they will struggle to even maintain regular expenses

Lesson 3 : Its good to have internal accruals and then growth…not vice versa

Lesson 4 : Ability to get high amount of debts and have a high debt equity model might make the business model look attractive to some….however heavy debt is what it is on balance sheet…debt that needs to be serviced

Lesson 5 : Steady growth is not bad and periods of consolidation after every round of growth is very good….often we don’t give the business an opportunity to go through consolidation phase in fear of loosing growth advantage

 While some of the above lessons are bringing about great sense of realism about ways of managing business, to me what’s interestingly standing out is importance of “strategy” in such times….rather paradoxically though. It’s important to understand that market is what we make of it. If ever strategy was going to create huge differentiation for organizations, its periods like now. These are times to learn from conditions and not succumb to them. Far too many organizations have resigned to the fate of economic conditions today….there is difference in picking up the learning’s and moving forward, as against getting risk averse due to mistakes made in the past.

 Closer home, in the last quarter or so I have seen consulting firms in India which are down by 30-40%, as against firms which are up by 20-25%. That’s a huge differentiation getting created. Same very firms in the last year were growing at same pace when market forces created natural growth.

 Organizations which can imbibe realism in ways of running and managing business, but not loose sight of creating aspirations and meeting them through clear business strategies, are likely to go long way in times to come….watch out for how industry leadership positions in several industries change in next few years….they will change hands much faster than they would have in good times.

Cheers

Two CEO’s Better Than One

Indian technology giant Wipro has replaced former CEO Vivek Paul, who left in 2005, with two joint CEOs recently: Girish Paranjpe and Suresh Waswani.

 

This is a more than ever prevalent phenomenon. I see more and more companies which are adopting this route. There are surely some merits and advantages of this approach.

 

Let’s think about some advantages of this system over the more traditional system where few people ran for the post and only one made it:

 

-          In usual format, very often the top contender who does not make it, leaves the company (GE has several such instances every time they appointed global CEO). Joint CEO’s ensures retention.

-          How often do you find that the CEO is either strong in market place (customer oriented, sales kind of guy) or work place (people oriented guy). You don’t get the right mix of both easily. Joint CEO gets you that.

-          It provides for natural in-built succession planning as even if one leaves, you have the other completely on the job.

-          With the power of two to tango, persistence ability in implementation of strategy becomes much improved

 

Let’s look at the other side now in terms of disadvantages of this system:

 

-          In order to maintain balance of power almost every process in the Company would be divided amongst the two guys

-          Consensus driven strategy would almost always over ride the best strategy

-          Your people start getting dividing into camps on both side

-          Nothing is spontaneous and honest. Almost everything is pre-thought pre-planned to ensure friction.

 

I am sure there are several other benefits and disadvantages of this system. However I am of a firm believer that if strategy itself is not strong and powerful, no internal mechanism can deliver great results. I personally feel there is net loss to the company in long run in this system as everything gets convoluted in order to ensure consensus between the Joint CEO’s.

 

What are your thoughts on Joint CEO’s as a concept??

 

~~Rohit~~

Leadership Styles

 

I have come across several business leaders in my life and have worked with quite a few of them. Though I have gone through various philosophies and concepts on leadership styles, types of leaders, and infact am a certified leadership coach, here is my crude take on various kinds of leaders on a lighter note J

 

Becho Becho Becho – These are the P&L leaders. They are constantly talking about growth and typically thrive on high pressure environment. They would often create pressure environment in organization, maintain constant pressure on sales, would indulge in conversations that would tire down an individual (no matter what the subject be). For them any business is like selling soaps, a factor of supply in the market that is J To give credit to them shareholders love them and they often make very successful businessmen.

 

Heads I win Tails You Loose – These are leaders for whom life is about being one up…about making some point at any cost in every situation, irrespective of whether it makes sense or not. Often they are self obsessed and very conscious of looking good. If this trait is mixed with intelligence it can be a deadly combination…you love them at times and hate them at times. Love them, hate them, you can’t ignore them J

 

Stand for your leader – These are the set of leaders who will always say the ‘right thing’ at all times. Infact they will never accept crude realities of business as it might amount to standing against your leader at times. Good or bad, stand for each other. They create a hugely positive environment for their seniors and preach them the philosophy of standing for them as well. The tag line is “You support me and I support you….at any cost”. To give them credit like I said environment is usually motivating and positive, though problems often don’t get solved as they are never admitted.

 

Market ki Suno – These are the set of leaders always tuned into market and reacting accordingly. They would spend more time with clients then sitting in office. They are often very well respected in the market and are thought leaders. Very high on innovation as they would create a new solution during client conversation in a click. Most of this set of leaders is divided into dynamic business leaders who are very volume driven or thought leaders. Difference between them and first type on top is this set is not driven by selling something; they are driven by genuine want to sit with customer and help. Money might not even come in often J

 

Daro aur Darao – These leaders are very hierarchy conscious and create a tremendous amount of fear in organization. They would often resort to screwing someone’s happiness and sending out a message of ‘don’t mess’ J Well they do maintain very high degree of discipline and delivery.

 

Main Hoon Na – This is the set of leaders who are spiritually very arrived J Always willing to go extra mile for helping someone achieve their dream, resolve their problem, motivate them when down and out. Also run very successful business since they leave a strong impact on customers with their genuine approach.

 

Now each of the above type possibly makes a very successful businessman depending upon their skill set and capability. Just that they all have taken different routes in life. I have personally found great learning’s from each type and this is not a critique on any particular type of style J

 

~~Rohit~~

 

Theory of Employee Engagement and Motivation

Over the years I have come across several models of calculating levels of employee engagement and motivation. Whether that’s a Hewitt Model of Employee Engagement or Gallop’s model, all of them have there own unique strengths.

 

However when it comes to means of improving and changing that, almost all of them lead to some kind of action planning around pain areas. While I am in agreement with planning around specific pain areas, I have formulated my own theory of how to keep employees engaged and motivated. Through my experience I have rarely seen this not working in organizations.

 

So here go 5 salient features of my theory:

 

Keep them occupied: Nothing is more disengaging then sitting ideal. It’s the start of most of the problems. Like they say ‘khali dimaag shetaan ka ghar’….almost all of them are happier working hard and working late. They would all crib about late hours at times but its much more motivating situation than sitting ideal. For lack of better way to explain it the feeling of getting your salary after hard days work is an motivation in itself.

 

Intellectual pressure Not Delivery Pressure: The more you create a thinking environment where everyone is getting pushed to think new and think different its very satisfying. Most of the organizations create pressure on delivery and targets which infact often works in opposite direction and shuts thinking part of the mind.

 

Plan for Individual’s Success Not Failure: It’s very important that organizations create an environment and opportunity where individuals can look back on the year and see some personal achievements and not failures. Several organizations thrive on keeping unrealistic targets around everything so that there is always something more to achieve. While to some extent I agree with theory of stretch one must ensure an employee has some proud moments to look back upon. Trust me you can plan for such moments and it will be very satisfying for them.

 

Provide Variety: Get them to work on different aspects of a job and try their hands on multiple things. It will make them feel important in every aspect of organization, create skill enrichment and provide back up support for every job.

 

Enlarge Opportunity Size: If they have achieved and delivered X size, provide them with an opportunity to try their hands on 2X, once they do that provide them with opportunity of 4X and so on. Give them a chance to feel they are constantly growing.

 

Now most of the above things need not require job rotation, career planning and such other formal frameworks. I believe we are fortunate to be in a growth economy wherein it’s much easier to create such an environment. It’s no rocket science actually. If usual day of an employee is well earned, interesting and full of high, he or she is likely to feel engaged and motivated. Unless you make the usual life for an employee interesting, all kind of formal programs would achieve very minimal.

 

~~Rohit~~

 

BCCI and Constructive Leadership

OK then…I am back to my favorite topic…Cricket J

 

I must admit I am no fan of BCCI, its affair with politics, its show of dictatorship to ICL…so on and so forth. However I have been pleasantly surprised with its constructive leadership behavior in IPL matters…..(what we trained leadership coaches at Hewitt call as Blue Style of Leadership).

 

Some interesting instances/matters:

• They have ensured they took boards of all country along with them and did not make them feel threatened or awed (even though they made more money from a venture yet to take off, than all other cricket boards’ yearly incomes put together)
• They ensured they gave all positive vibes to ICC…didn’t push for a change in annual international cricket calendar for example (knowing very well though eventually ICC would do that on its own)
• They gave all the emotional support to countries thinking of launching similar leagues…for example UK talking about English Premier League of cricket….(knowing very well it hardly threatens their financial clout and actually adds to the international twist they can add to their own league)
• They ensured they gave support to players approved by respective boards and not otherwise, taking away any concerns of rebels…thus backing organized set up more than individuals to ensure sustenance

 

Interesting they have done all of the above without a single ball being bowled and yet made this into a $2B venture already J

 

And you thought I was following the game for nothing….I still have a chance to get hired by one of the club teams…maybe ICL if not IPL J

 

Rohit