Responsible leaders are by design, not destiny

Leaders have to give the employees confidence that they will always be there for them under any circumstance, provided they perform with complete dedication. Responsible leaders also have to look at comprehnsive stakeholder engagement and give back to society, Discusses Dr. J.J. Irani (Chairman, iim Lucknow, Board of governors)

24-1-4The business environment can continue to evolve from one cycle to the next, new technologies can relentlessly enter into the market to replace the old and business curriculum as well as the management thought process may be upgraded several times over to keep pace with the times. But the essence of great leadership, to my mind, would remain more or less the same.

And great leadership starts with the realisation that while you can potentially achieve outstanding results if you are able to provide your business the leverage of having the best of technologies and processes in your industry on the day, but it would all prove really futile and in vain if you cannot have employees with the right mindset. In my experiences at Tata Steel, I realised that a critical part of this mindset has to be the ability to stay out of any comfort zone.

When we abandoned the cradle to grave culture in Tata Steel, it was a difficult process of transition, but it was identified as an unavoidable necessity. Managing a company through crisis can be compared to treating a patient in an Intensive Care Unit (ICU). The patient may have to go through numerous painful medical treatments and tests, and similarly, an organisation may have to go through a period of painful transition if it has to make that spectacular turnaround. Such a turnaround is incomplete without the will and passion of the people involved. If people realise that they have to win their own battles and no one is indispensable in a company, they are the right kind of people to deliver on your objectives. Creating a sense of ownership and responsibility across the organisation is the key to hold your own and grow in today’s highly competitive environment. Once people realise that they are mutually dependent for their individual good, they will prove to be highly productive.

Having said that, our endeavour at Tata Steel was not about giving up on the traditional philosophies on employee management altogether. Motivated people without the right sense of direction at the top would be certainly setting themselves up for failure. They are akin to poles that are all randomly oriented in an un-magnetised iron rod. But when it is subjected to a magnetic field, they (the poles) all get aligned in the same direction due to the process of magnetisation.

25A leader has to play the part of the coil carrying the current so that the entire team gets aligned. The role of a leader is to inspire and lead them for the larger good of their organisation, and ultimately their own as well. A true leader never gives up on personal touch. He has to constantly communicate with his people, be it an integral part of their lives, and also ensure that they always feel that he is there to stand for them through thick and thin, as long as they are doing their job with complete dedication. Leaders who prefer to stay in the cool comfort of their cabins are not really leaders. In a similar vein, leaders who have expectations from their followers that they themselves cannot meet will not go very far. And that eventuality would be by design rather than by destiny.

In addition, the CEO is the best advocate for the company in the outside world. It is very important for him to communicate with all the stakeholders outside the company on a continuous basis and ensure that the business has a thriving ecosystem, besides looking for growth opportunities as well as potential threats in the task as well as the broad environment. And if he manages that, his subordinates will automatically follow his lead. Communication is like the lifeline of an organisation, and if a leader falters on that critical front, his ‘magnetic’ force will remain largely ineffective and lude him.

Of course, the manner in which people express themselves as leaders has a lot to do with their individual character traits. But all leaders have to be prepared to accept that people under them are also individuals in their own right and can often have differing views. Consensus is valuable thing to have in theory; but in the real corporate world, it would be inane to expect too much of it. Harsh decisions can often lead to acrimony within the ranks, but it is a leader’s privilege, as well as his prerogative and responsibility, to take such decisions whenever required rather than putting them off for want of a more democratic solution. Some of the dissenters will fall in line ultimately, and you have to look at ways to ensure that the rest of them are unable to do any damage. If your employees trust you implicitly, these issues will hardly crop up. Therefore, it is also extremely important to maintain your credibility in the organisation and go by your very last word. There is also a significant amount of skepticism and cynicism in the organisations of today.

26Without removing the trust deficit that exists in your followers, you cannot build or even sustain a great organisation. Remember that if you do not have people to stand up for you in difficult times, there can be no greater failing for you as a leader. The delicate part of credibility is that it can take years to build, but it can be destroyed in an instant. The Tata corporation has thrived in letter and spirit with its motto ‘Leadership with trust’, and this is why the group remains an iconic benchmark for India today.

In my dictionary, success is never about luck. It is all about preparation, meeting  and opportunity. People who are prepared to seize their moment when it comes have been at the helm of landmark changes in society throughout the course of human history. And, it is not just about those very obvious names through history like Mahatma Gandhi and Nelson Mandela.

There are many people in various spheres who have created immense value for their organisations by being in the right place at the right time and also by maintaining the right kind of positive mindset.

Youngsters in today’s highly competitive world, where you are said to be either in the rat race or out of it, may find it hard to agree, but successful and fulfilling leadership is always about the right ethics and values. For instance, it is about what decision you take if your competitor does something unethical. Logically, you would like to follow suit, since refraining from doing so can lead to some depletion in your competitive positioning within the organisation. But one can also be profitable while remaining ethical.

27 (1)As it is, a business can never be run on a short term basis. Short term plans can never take precedence over your long term goals. While compromising on ethics and values can give you short term results, glory in the long term belongs to those who play fair, play the game of business according to ‘rules’ even when their competitors do not. The community at large ultimately trusts and rewards the company that has an unblemished track record and unflinching commitment to the larger good. Our group’s own experiences illustrate this very aptly. For instance, in the states of Bihar/Jharkhand, there was a lot of unrest that threatened companies operating there, but the Tata Group’s operations were not affected. The reason was that the concerned communities knew that our exit would also seriously affect our social activities in the area. And if that happened, the insurgents would themselves lose their support base in the region as a consequence.

And once you acquire wealth, it is your responsibility to give back to society individually or through your organisation. You have to keep yourself well aware of the situation that exists in the community around you and work towards their overall welfare. Leaders have to necessarily initiate and also lead the implementation of triple bottom lines in their organisations and know that every helping hand counts in the noble endeavour to improve the quality of life of people around you.

It is important that you have regular social audits and ensure the locals are deeply involved in the initiatives being taken for their welfare. Believe that you are leaders of tomorrow for the 1 billion plus Indians and responsible for their welfare. If its leaders act ethically and responsibly, India will become the happy nation that J. R. D. Tata envisioned. For him that was far more important as an objective as compared to becoming an economic superpower.