Demonetisation in India

My take on the current demonetisation situation:

1. In current political climate it is suicidal to accept that you have made a mistake. BJP government will therefore not admit to any failings. Nevertheless, the implementation and benefits at this stage are unlikely to exceed the costs from current point of view.

2. Let this be a lesson for all leaders who think revolutionary changes are cool/ they can change a large entrenched, rotten system overnight with few, big moves. Ideas of Arthkranti (the guys who gave this idea to Modi), while appealing on paper, have no historical precedence of actually working. Changes need to be incremental, systematic and well thought of. Disruption is not always good and change is always slow & painful.

3. Modi has seriously underestimated the will of 97% people to evade taxes and stay out of the system by any means possible. It is not easy to seek people's direct cooperation to act against their self-interest, even if the move benefits the whole society.  

4. If Modi wants to salvage the situation, he can use the chaos and confusion created by this move to push through serious reforms to tackle root problems. Tax raids, pushing digital transactions, stronger anti-tax evasion rules and marginal tax on gold to enable tracking gold transactions are steps in the right direction. Bringing in the right to service act as envisioned by Dr JP + continual shift towards e-governance will stem more corruption than demonetisation. 

5. It is time to bring in laws to prevent disruption of Parliament

6. I still support Modi as I see him as a leader who intends to change the system for good. I have not seen any alternative leadership that I could trust more. I would happily support any national leader who offers a constructive, reasonable intelligent plan and a leadership and is capable of forming a stable government at the centre.

7. The only people who make mistakes are the ones who try to do something. Nevertheless history rewards only success, as highway to hell is often paved with good intentions. Modi may do well to remember this.

Bad Management is Easy!

Recently I came across a manager who gave her entire team a negative feedback. Strangely, the feedbacks for the same people for jobs done for other managers before and after this particular job were fairly positive. This got me thinking: did the people drop dead for two weeks or was there something else going on. I was surprised that this did not get any alarm bells ringing anywhere else. Even worse, the blame and negative consequences got apportioned to the team rather than the manager. I think this is a very good example of bad management compounded by poor organisation response.

I think a good manager lies at the heart of a vibrant organisation and needs three crucial skills to succeed: project management, communication, and team building.

Project management can be learned by studying and adapting project management techniques and frameworks like Scrum/Agile, PRINCE2, etc. Alternatively, it can simply mean being organised and keeping on top of the project and actively managing its risks. 

Good and effective communication is an integral part of project management. I write it as a separate skill as I have now seen too many poorly worded emails and negative communication as one used by the manager above. For example, in the above case the manager did not effectively communicate with her team during the project, holding on to a grudge and giving a negative feedback two months after the job to a surprised team. Not to let the team off the hook, it can be argued that they could have tried to communicate with the Manager as well. However, if the Manager is deemed more senior, paid more, and given more responsibility, I think it is fair to say that bad team communication is primarily a managerial failing.

Team building is a skill that I would look out in manager who I expect to take on a leadership role in the company at any time in the future. If you are operating in a super-competitive knowledge based industry, success will be defined by being able to hire and retain top-quality talent. And, managers can be pivotal to this: most of the times when people leave a company, more often than not they leave their managers.

In the above case, I would definitely try to dig a bit before readily blaming the team (especially if they seem to be doing a good job otherwise). I would pull them up for taking an initiative on communication if the manager was doing a poor job of it. However, my main target would be the manager from whom I would expect more than trying to escape blame for a badly run project by blaming the team.  

All the skills above are not rocket science and can be taught. Really, these are the basics, and better organisations stick to them.

Looking to History for Roots of Management

I have just finished reading three books: "Concept of Corporation" and "The Practice of Management" by Peter Drucker and "My Years With General Motors" by Alfred P. Sloan. I read these books to understand how management as a subject was born and what is management all about actually.

History, I have always believed, has the roots of what we see today and lessons about what to avoid. The central theme that I have picked from these three books is that optimum decentralization with a strong core is the secret of managing growth. Not only it makes managing easier, but also it helps to test and evaluate managers without endangering the whole enterprise. An enterprise that cannot generate its own leaders is bound to run into trouble sooner or later. To generate leaders and retain good people, the company's course of action and its expectations from its people needs to be transparent. This brings us to what Mr. Drucker calls managing by objectives, that everybody in the organization has clearly defined goals and is able to track his progress objectively. The next challenge is aligning the interest of the individual to that of company by helping each person to see the whole rather than one, small, obscure part. Giving people more responsibility and meaningful tasks are the suggested remedies.

The concepts, as simple as they may seem, offer a powerful perspective supported by recent books like "Good to Great" and "In Search of Excellence". This makes me feel that there do exist some basic, common-sense tenets or principles that remain unchanged over time, but still need some experience and wisdom to apply correctly. Perhaps this will keep the management an art known by many and perfected by few.

My VICTOR Framework

How does one get the best performance out of the team? This is a fundamental question with no definite answers, a question to which considerable academic research and books have been dedicated. For the uninitiated it can be like the search for an ever elusive fountain of youth. My thoughts on it out of my experience. I believe keeping an eye on the following is necessary to maintain a top level of performance (my VICTOR framework!):

1. Vision: What does your company stand for? If your company has no concrete vision, what do you think your group stands for? If you can articulate it in few words and communicate it effectively to your team, and then go on to implement it in every aspect of your functioning; you will be able to build a strong team. Your hiring needs to be careful and needs to carefully consider the culture of the company.
2. Individualization: You have to remember that what motivates and drives you does not necessarily drive everybody. Spend time with your team, get to know how people fit and what they can do best. Focus on strengths and put people in the right place instead of picking on their weaknesses.
3. Consistency: Whatever you do, you will have to be consistent with it. Random changes (changes that appear random to your team) can confuse and demoralize.
4. Transformation: If you talk, walk the talk. Make real changes, put systems on the ground and take people into confidence. Else you will loose credibility sooner than later.
5. Output: Put in place ways to measure the output,without which there is no way to credibly measure the success of the changes.
6. Reward: Encourage positive behaviour by rewarding it. Take the career of each member of your team member seriously and let them know that what kind of growth path you have in mind for them

I will expand on this more in my future blogs. I will end with saying that any development methodology and any process can do only so much. Without the passion of the leader, consistent top-level performance is only a pipe-dream. If you cannot nurture talent, the talent will leave you. Especially in sectors like IT, where the demand is much higher than the supply, understanding and nurturing your team is of paramount importance.

Are B-Schools Failing to Produce Business Leaders?

One of my friends brought to my notice this topic for a debate that took place recently in a business school. What are my thoughts about it?

I believe that leadership is the ability to guide a group through difficult situations without seriously compromising the cohesion of the group and keeping in mind the long term consequences of the actions. Extrapolating it a bit further, I would say that leadership is a direct function of the willingness to take responsibility, decisiveness, perseverance, clarity of thought, empathy, self-awareness, reasoning, integrity, openness to change, ability to moderate tense discussions and lack of hubris (please feel free to add if you think I missed something!). And this, I believe, cannot be taught though it can be learned, i.e. somebody who wants to become a leader can possibly cultivate these traits over a long time, but you cannot teach them to somebody in a year or two. Leadership, talking in mathematical terms, is the vector resultant of a personality that cannot be altered overnight.

Elite B-Schools attract top-notch talent, but does it really translate into great leaders for the society? Let me play the devil's advocate and talk about the possibility that business schools are indeed not producing as many business leaders because they do not need to produce that many leaders: not all roles assumed by MBA graduates require strong leadership skills. How much of a leader does an Investment Banker needs to be? Similarly being a technically brilliant manager is not always the same as being a natural leader. A people-person could excel and even grow in sales, marketing or HR without actually being a good leader. An analytical, people person could excel as a consultant. And so on. Leadership is good to have, but is it mandatory for graduates to be economically successful? Moreover, elite B-Schools can, and do, build a mentality of entitlement in their graduates which can be totally anti-leadership. Hence, in all possibility, the assertion may be quite true: B-Schools are indeed failing to produce business leaders for the simple reason that they were built to educate brilliant people to contribute meaningfully to a business, and many such functions can be achieved without strong leadership skills.

I think that business schools are excellent facilitators of the talent. In fact, they can nurture it and provide an excellent network to support some brilliant minds. Hubris, however, can be the bane of elite business school graduates. Most of the people would like to think of themselves to be leaders, but very few really are. Of those that are, very few would like to take the hassle of exercising it. In fact, fat salaries and corporate growth is possible without good leadership. Business schools can be excellent learning grounds for people willing to grow as a leader, but I am not sure if that would really happen. Good leadership is simply a scarce commodity.

Built to Last: Underestimating Leadership

I have started reading 'Built to Last: Successful Habits of Visionary Companies' by Jim Collins and Jerry Porras. As the title suggests, the book aims to analyse the habits of visionary companies for the benefit of entrepreneurs, managers, CEOs and other business building professionals. In this, its research methodology is pretty similar to "In Search of Excellence". It differs, however, by the fact that it tries to bring out the successful habits by comparing the visionary companies with good but not visionary companies in the similar sector. I think the book may have some useful insights just because it uses some practical examples and data to assert its beliefs. Nevertheless, I would take what it says with a big pinch of salt.

One of the first assertions that I have read in this book is that one does not need a leader to make a sustainable great company as great companies last much beyond their leadership. Instead, a company that is value-based, can clearly articulate its purpose of existence, find a profitable denominator and implement its philosophy consistently across the board will succeed. Moreover, the author believes that anybody can become a leader.

I find the entire assertion true and childish in equal measure. What the author says is true theoretically, without a doubt. It is akin to a preacher telling us that we all are potentially divine and there is a saint within all of us. It may be a good management policy (or the politically right thing to increase book sales figures) to tell everybody how good and equal they are. But lets face it: human beings are neither same nor equal. Our physical strength, knowledge, capabilities, experience, motivations, morals, beliefs, wisdom and ambition differ. Our faces, finger prints and bodies differ too. Potentially and theoretically everybody can be equal. And theoretically Communism can be the most humane system of governance. We, however, do not live in an ideal world. Hence, the concept of equality is absurd as one can compare only apples with apples. You could, for example, say that one lawyer is better than the other lawyer in the field of intellectual property rights, but to assert that a top lawyer is better, equal or worse than a top athlete is simply stupid unless we can define a common, intelligent and universally acceptable denominator for comparison. Human beings due to their essentially uniqueness are difficult to compare in absolute terms. So, calling them equal is an easy and the wrong way out. In practical terms, everybody is not equal and everybody cannot be a good leader.

Moreover, good leadership is the result of wisdom gained over years and cannot be possibly taught in a three-day workshop. Practical corporate experience or an MBA can possibly help to develop it, but even that is not guaranteed. To cultivate leadership one needs courage, maturity, experience, strong beliefs, patience and the ability to rally people. There is no short-cut to leadership or to grow a company without a leader. He is always the starting point, whose mind and strength will ultimately shape the organization and its future.

I may also add that even Jim Collins was forced to recognize the need for a Level-5 leadership in his other book, Good to Great. The truth remains that only such a leader can create leaders and engineer a self-sustaining process that can carry a company far. A Level-5 leader is indispensable for building a visionary company, as is evident from all the examples given in both the books. Such leaders, like true Level-5 leaders, may shun publicity and die unknown. Nevertheless it does not eliminate the need or importance of such leaders because only such leaders are capable of building a visionary company and can also turn-around a normal company into a great one. Moreover, to assert that anybody can become such a leader is no different from saying that anybody can be Mr. Universe. The hard work, mental discipline and perseverance necessary for it are not laid out clearly enough, to the extent that the need of good leadership has been significantly played down. Without a gardener who sows the seeds properly and takes care of the sapling, chances of having a giant, fruit-bearing tree are downright difficult, if not impossible.