Feeds:
Posts
Comments

Posts Tagged ‘Siemens’

Leadership is a much discussed virtue in management literature. However, like Peter Drucker says, there is no ideal type of leader. “Leadership personality’, ‘leadership style’ and ‘leadership traits’ don’t exist”, he writes in The Leader of the Future. The emergence of a leader is the result of a complex interplay of two factors – personality traits of the leader and what needs to be done at a given point in time. The moment the two become congruent, a new leader could emerge on the scene and deliver the goodies!LEADERS

There is no doubt that the leaders of tomorrow would need personality traits which would be qualitatively different from those of today. Here is my take on what business environment circa 2025 would be like, and how our future business leaders would be tackling it.

2025 – A Likely Business Scenario

What would be the business environment like in 2025? Several CEOs I spoke to said that business leaders in 2025 shall be working against the backdrop of a world which would, in all likelihood, be a multi-polar one, with Asia, particularly China, exerting more influence on global events. It would be a world which would be more inter-connected, commercially and otherwise. Thanks to new communication means, the individual empowerment levels would have risen significantly. Also, it would be a more urbanized world. Thanks to the rise of a new global middle-class, society in general would have reached a higher level of aspiration, resulting into a much higher demand for energy, food and water. On the flip side, income disparities would have risen substantially. Changes arising out of our climatic patterns would also pose a formidable challenge to the leaders of those times.

We could still be in for surprises, though. Disruptive changes are quite likely to overwhelm us. These changes could come in the form of impact of new technologies in the field of robotics, biotechnology, space sciences and communication. Increasingly, governments world over may start becoming enablers of entrepreneurship, faced as they will be with direct and intensive pressure from those they govern. We shall surely be seeing more entrepreneurs amongst our midst – whether in the commercial sector or in the societal sector.

A Business Leader in 2025

Decision Making Under Higher Uncertainty

Since the level of entropy in the system would have gone up further by then, a business leader of circa 2025 would have to be adept at making decisions under a higher level of uncertainty. The abnormal today would be the new normal, and many a leader would be feeling more like experts at river rafting in our economic and statutory rapids, often being called upon to go against the current.

I am not an expert in Econometrics, but could venture to guess that for those who are quantitatively inclined, advanced statistical tools would come in even more handy. I say so because there will be an overdose of data as well as information available to a business leader then. However, ultimately, his/her intuitive abilities – based on personal experiences in their formative years – would prove to be more valuable.

Sir Colin Marshall, the ex-Chairman of British Airways, transformed his organization into one of the premier customer service kinds in the days of yore. The uncertainty he faced in the period of his association with BA was monumental and serves as an example to be followed by CEOs of future.

Jeff Bezos of Amazon came up with the concept of ‘predictive analytics’, paving the way for all of us to enjoy the convenience of shopping on-line.

Higher Trust in Instincts

A logical corollary of the above would be the need for a leader to be ahead of the curve. Those who have counter-intuitive responses and place a higher trust in their natural instincts would surely fare better. In turn, there would be a strong need for a much higher degree of inner resilience, because this alone would enable them to keep their stress levels under control even in trying circumstances. Dynamism will be yet another critical input. It would ensure that they are able to steer their businesses through the dense economic fog enveloping the business highways.

The World Economic Forum had proposed a theme centered on the twin traits of resilience and dynamism for 2013. Given that there are no risk free growth models available to leaders and CEOs of the future, one could not agree more with this proposition.

A good example of facing flak and not losing sight of one’s goals is that of Larry Page of Google. He continues to trust his instincts and doing what he thinks is best for his business.

A Global Mindset

Given a much more inter-connected world, a business leader in the future would need to possess a vast knowledge of commercial, behavioral and societal norms followed in different parts of the world. A primary task would obviously be to ensure that his/her organization has world-class management processes. Only those institutionalizing best practices in strategic planning, marketing and human relations would be able to make their organization a successful one.  The fact that a leader would, in all likelihood, be leading a multicultural team of followers would pose a challenge – irrespective of whether the situation demands a leadership which is ‘transactional’ or ‘transformational’.

When one considers the example of Compaq’s Eckard Pfeiffer, who was a leader in a race against himself, it becomes clear as to how organizational renewal can be brought about. “No matter what industry a company competes in”, he said, “it must live with one foot in the present and the other in the future….there is simply no other way to build world leadership”.

A Democratic Style

The profile of the followers would also be different. Hierarchical authority is already proving difficult to manage change; there is no reason to believe this would not be even more so in the future. The followers would demand a higher degree of participation in the decision-making processes. Leaders who recognize this need of their followers and create a working environment which enables the same would achieve higher levels of efficiency and effectiveness in their business processes.

Creating a non-coercive environment in which employees and other stakeholders are clear about the corporate identity and the mission would be far more important than it is today. Reverse mentoring would be more a norm than an exception in the days to come.

Monsanto’s CEO, Robert Shapiro, had the ability to go against traditional hierarchy. He initiated strategy sessions with cross-sections of employees of different ranks, specialties and geographical perspectives and reaped rich dividends for his company.

The Moral Compass

Leaders who believe in sustainable businesses would not only use their commercial compass while determining the direction to take. Using a moral compass would be a valuable trait amongst the future leaders. A strong inner core, embedded with a value system which recognizes the needs of the society at large, would be a great quality to have. A pre-condition for employing key managers would be their endorsement and support of the core values of the business.

When the likes of Siemens and Wal-Mart come clean on their misdemeanors, they set an excellent example of probity in the business world. When Mr. Ratan Tata, the Chairman Emeritus of India’s salt to software conglomerate rues his inability to enter some fields of business because of the absence of a level playing field in India, his focus is on one of the core values of his business.

Indra Nooyi is charting a unique course for PepsiCo globally, shedding traditional markets and going in for healthier food products instead.

 Preparing Leaders for 2025

Captains of industry today can set a personal example by getting cross-functional teams in their organizations to come up with suggestions to face the challenges of future effectively. They can also emulate some of the traits, thereby leading to a trickle-down effect across the entire organization.

HR honchos can re-design their appraisal processes and re-assess training needs of key managers to address this issue.

Those in senior management positions can consciously plan to hone their skills in areas they find themselves deficient.

Management institutes can tweak their course content to ensure that those leaving their hallowed portals possess these traits, so as to improve their contribution towards the organizations they decide to either float or serve.

And our time to start preparing the leaders of tomorrow starts now!

 

Advertisements

Read Full Post »

It is heartening to note that as many as six large Indian corporate groups have joined World Economic Forum’s Partnership Against Corruption Initiative at a recently concluded WEF India Summit in New Delhi. Infosys, Wipro, Godrej, Bajaj and Genpact have thus joined ranks with MNCs like Siemens, ABB and Rio Tinto in pledging to stamp out corruption across all their business verticals. Thirty more companies have apparently discussed concrete action that they can take to curb graft in their business dealings. A small beginning, but a crucial step appears to have been taken in the right direction. 

Corporates – Victims as well as Participants

To lay the entire blame for corruption in high places at the doorstep of either the politicians or the bureaucrats is like looking at only one side of the coin. The corporate world is not only a victim but also a participant in the vicious cycle of corruption that corrodes our economy and saps the vitality of our constitutional institutions. The fact that business has finally articulated its voice against unfair practices goes on to confirm that anti-graft measures make eminent sense as a business strategy.

India Inc willy-nilly becomes a partner in institutionalized corruption not only because of its need to line the pockets of those who make and implement laws and regulations which touch upon their businesses. The need to milk the exchequer to generate vast sums of cash to fund political activity also contributes towards the malaise.

Setting the Moral Compass Right

Siemens’ is a case in point. Based on investigations between 2001 and 2007, the German engineering major admitted to several bribery charges and paid fines of USD 1.6 billion to US and German authorities. The cases involved its operations in such far-flung countries as China, Venezuela, Argentina, Iraq, Bangladesh and Vietnam.

A massive clean-up started, starting right from the Board of Directors. A Compliance Director was brought in. Besides organizational changes, compliance teams were set up across all the business verticals. All such teams formed an integral part of the respective business processes but functionally reported to the Compliance Director. As a policy, internal whistle-blowing platforms were created. A conscious decision was taken to withdraw from projects and territories where it was not possible for the company to engage in clean business.  In other words, rather than confining itself to paper affirmations and lip service, anti-graft measures were made an integral part of the business processes of the company.

It is not surprising that Tatas, a group renowned for its ethical standards in business, decided to study the Siemens model. It is well-known that for more than a century, Tatas have maintained a steady rate of growth without succumbing to the charms of shady deals as a means to the end of making profits. The result has been a steady build up of the trust placed by the public in the Tata brand.

There are many instances of small businesses the owners of which suffer sleepless nights when asked to shell out taxes of any kind. Some reckless souls end up crossing the thin line dividing tax evasion and tax avoidance. There is no dearth of professionals who specialize in supporting such efforts, either due to pecuniary considerations or owing to the need to be in the good books of their bosses.

Quality and Types of Corruption

The World Economic Forum deserves to be lauded for its efforts to facilitate the anti-graft renaissance amongst India Inc. However, what needs to be realized is that the quality of corruption has undergone a major change over the past several decades. Way back in the late 1970s, it used to be either about bending the rules or for terming a “wrong” as a “right”. Now, it is mostly about framing the rules in such a way as to favor a privileged few, and terming a “right” as a “right”!

Corruption, as we face it today, has become more refined, operating within the legal paradigm, at subterranean levels. Corrupt practices brook no standardization; there are different kinds which have evolved depending upon the situation at hand.

The customary kind is designed to prevent harassment and delays. “Speed money” helps smoother implementation of a business venture, within the ambit of rules and regulations in force. This kind also covers a bidding process where all players do not get a level playing field.

The predatory type of corruption is one where those connected to power centers exploit business opportunities armed with prior knowledge of the development projects being planned. Again, all activities would be within the ambit of law, though there would be an in-built advantage in favor of the well-heeled.

The patronage kind of corruption is based on cliques. A team gets formed, and the proceeds typically flow towards the higher echelons. Private businesses as well public sector entities fall prey to this type of corruption.

Companies typically face internal corruption in such areas as procurement, logistics, outsourcing and the like. Internal audits are useful to curb these to some extent, but the real game changer is a clear message from the top, as also an exemplary reward and reprimand system for those who work in sensitive areas.

Then there is petty corruption which all companies and individuals face in their day-to-day operations! Eradicating this type could perhaps be the toughest challenge.

The Road Ahead

The RTI Act in India has surely been a very progressive step in the right direction. It has brought the corruption issue centre-stage and continues to remind us of the fragility of our systems and procedures at regular intervals.

The response of our business leaders to the initiative of WEF is praiseworthy. One would watch their future actions with a keen sense of anticipation and hope. If the business in India comes together and forms a self-regulatory Corruption Watchdog, it could bring in a major change in the way the masses perceive its conduct. Corporates can also resolve to make all political donations transparent, thereby dismantling one of the main pillars of our parallel economy.

The fact that India is ranked 94th out of 176 countries in corruption by the 2012 scores released by Transparency International is a wake-up call to all stakeholders to address this issue with all the seriousness it deserves.

Leaders with a High Moral Quotient

I may sound like a pessimist, but I do believe that just like the oldest profession in the world, viz. prostitution, the oldest practice in the world, viz. corruption, cannot be altogether eliminated. But all self-respecting citizens – corporate or otherwise – would perhaps agree with me that it can at least be reined in, if not eliminated.

For this to be achieved, both the Government and India Inc can work in tandem. The Government can pitch in by playing the role of a transparent facilitator of business and by renewing its efforts towards creating a more equitable and inclusive society. Corporates can effectively contribute towards this goal by depending upon those who have the wisdom to differentiate between right and wrong. In other words, by having leaders and managers who have a high Moral Quotient!

In the long run, a sound business strategy means steering a business by using a moral compass as well!

 

Read Full Post »