66.LEADERSHIP IN BUSINESS

66.LEADERSHIP IN BUSINESS

NOWADAYS, leadership is much discussed in business (management) schools and business circles. In these environments, the concept assumes standard features and jargon. It is like shopping in the supermarket: products neatly packed and stacked in rows, each carrying an identification tag read by a computer. All supermarkets are alike, all products are the same! Likewise, all management graduates are alike: mastering the same jargon and techniques. Or, it is like a committee trying to invent the horse. And most of them are equally ineffective!

We may apply the three fundamentals we saw previously in the business environment too:

• vision/purpose
• ability to inspire
• ability to solve problems /achieve results.

In the business environment, it is easy to define these concepts, explain the ideas and lay down the parameters for measurement/assessment of results. 

Business interests

 The business focuses mainly on its bottom line, so that all stakeholders are satisfied. Inspiration becomes motivation in the business environment. Most managers are motivated by pay, perks, career path or prospects. They don't really become leaders. They do not think beyond themselves. They do not even think of their organizations, except as they relate to themselves. It is the rare individual who thinks of his inner urges and tries to make a difference to the business, society, ultimately himself. At that stage he does not work for money or status or recognition but for self-actualisation , as Abraham Maslow termed it. Only such people can be called leaders.

Perhaps the greatest practical test of leadership in business is in the area of facing challenges and solving problems, which can surface in any area. Clever managers camouflage the real issues, doctor the accounts with the help of creative accounting professionals and manage for a time to keep the shareholders happy. But the problems do grow like pregnancy and reality catches up with creative accounting. This means utter failure of leadership.

Industry- Government  exchange in US
Company= country?

In a country like the US where  private business is supposed to predominate, there was a simple belief that the country would grow if the businesses prosper. 

There is a statement widely attributed to Alfred P.Sloan, a former , long time Chairman of General Motors that "what is good for General Motors is good for America". Actually, this is wrong attribution. Sloan was the Chairman of GM from 1937 to 1956. Charles Erwin Wilson (Engine Charles) was the head of GM in 1953 when President Eisenhower selected him as the Defence Secretary. During the Congressional hearings to confirm his appointment, it was found that he had huge stakes in the company and naturally they asked him whether he would as Defence Secretary take measures that may impact the company adversely. He said he would but added:

  "for years I thought what was good for our country was good for General Motors, and vice versa." 

This statement was wrongly reported in the press as "what is good for General Motors is good for America." Wilson tried to correct it but failed.  Now, people attribute the statement to Sloan!

Charles Wilson

One can easily see the vital difference between the two statements: the one he actually made during the hearing shows his maturity and his larger vision that the good of the country is important, it comes first.. The second statement shows him as a crooked businessman,, putting company above country, who might be expected to use his position to promote the company! Actually, GM filed for bankruptcy in 2009 ( Sloan and all 'great' leaders not withstanding), and it was the country's government  which rescued some operations, because GM was considered a national icon.

Businessmen as failed leaders

Sloan is taken as a leader among the managers and his book "My Years with General Motors" is studied as a management resource. It is true that he brought changes at General Motors  and made it profitable for a time. But recent research has shown him to be a failure, and cause of all the subsequent troubles, including its eventual declaration of bankruptcy. In particular, 4 things are held against him:

- His company helped the Nazi war machine in the 30s and 40s through their subsidiary in Germany and worldwide.

-He focused on rational management, stressing "policies, systems, structures", and not enough on "people, principles and values". Consequently, the employees and even the society at large were left out of consideration.

-Sloan is associated with the "great American scandal " of replacing the public transport system (Streetcars= Trams) with buses. He was also involved in violating many anti-trust laws but managed to escape with light penalties.

[ Incidentally, smooth, cheap and efficient  water transport on the Buckingham Canal in Madras was disrupted and made to close down by the bus lobbies ]

- His accounting systems did not help the company in assessing the true financial state.

Drucker  beyond technicalities

The great management philosopher Peter Drucker criticised the methods of Sloan at GM, though he generally appreciated the idea of how corporations related to society.. Drucker was asked to study GM and give advice, but his advice was never taken. His 1946 book,  Concept of the Corporation, is based on his study of General Motors. History has proved Drucker  right. Sloan was wrong, and the totally rational approach and accounting methods he adopted compounded the problems as time passed, leading to filing for bankruptcy in 2009. This is a classic example of how short term visions and goals of management excellence are a negation of true leadership even in business. Short term profits do not translate into long term survival! Doctor the balance sheet, nurse the sick company! Sometimes, one has to stoop to conquer!

Front cover of the first edition- given here for purely educational purpose.
Since Drucker dealt with basic issues and not mere techniques, he never goes out of date.

Incidentally, GM reacted angrily to Drucker's book. Sloan's book- also his memoir- is considered a rebuttal of Drucker's views. Like it is said a prophet is not honoured at home, Drucker's views were not taken seriously by GM. However, they were eagerly accepted and acted upon by Japan which soon surpassed the US in many fields!

from: www.blinkist.com/page19/

'Management is a human activity that must serve people both in and out of the organization'
Managers may have the talent, but they have the obligation to serve society.

Today, the top MBAs from business schools ask how much they can get, how fast they will rise. Who thinks beyond?

From Ford to Pentagon to World Bank

The business world has indeed contributed some outstanding persons to society through govt. The US govt has discovered how trained managers- and not bureaucrats- can help the govt become more efficient. Their Presidents are fortunate that they can assemble their own teams, and are not bound by fat bureaucrats that the system supplies. One such is Robert McNamara. He was Chairman of Ford- the first person outside the Ford family to occupy the position- when he was selected by President Kennedy with the offer of either Treasury or Defence Secretary. He chose defence and is the longest serving Defence Secretary in history, from 1961-68, serving under both Kennedy and Johnson, through the Cuban Missile Crisis and Vietnam War. He was one of the Whiz Kids surrounding Kennedy and contributed to the mystique of his presidency. He supported the blockade of Cuba.

McNamara with Kennedy, 1962

 He also supported the escalation in Vietnam, though later he claimed  that he had been convinced that it was fruitless exercise. However, documents now reveal that he resorted to some deception in the process, withholding vital information from President Johnson, misrepresenting facts and issuing orders on his own.The consequences were tragic and serious. He became controversial, and quit as Defence Secretary in February 1968. Then from April that year to July, 1981,he was the President of the World Bank. At Ford, as the Defence Secretary and in the World Bank, he introduced many technical changes. 

But is McNamara a leader? By no means. In 2003,when he was 87 a documentary was produced on his life, based largely on his interviews. It is titled: The Fog of War: Eleven Lessons from the life of Robert S.McNamara.

The eleven lessons explored in the documentary are:

1. Empathize with your enemy
2. Rationality will not save us
3. There's something beyond oneself
4. Maximize efficiency
5. Proportionality should be a guideline in war
6. Get the data
7. Belief and seeing are both often wrong
8. Be prepared to reexamine your reasoning
9. In order to do good, you may have to engage in evil
10. Never say never
11. You can't change human nature.

(From Wikipedia)

It can be seen from the above that McNamara is not associated with any streaks that make for real leadership.He was only a technocrat.

Business Leader in India

In the business world generally the term leader is loosely applied. The chairman or CEO of a big company is called a leader if his company makes big profits or he continues in his position for long. In that sense, we have many leaders. How many of them have thought beyond the company? 

Sir Jamsetji Tata

In the economic and industrial history of India, there is just one company- only one- which thought of the country before itself! Which thought of itself in terms of its contribution to the country and society. Which worked even if it could not declare dividends for ten years, because it was vital for the country! Which worked even when first the British govt and then our own socialist govt did not give any help or encouragement, but only created hurdles. That is the house of Tatas under JRD, with the vision of Jamsetji Tata.

Jamsetji Tata was a wealthy man,but to make more wealth for himself was not his aim. R.M.Lala captures the mood beautifully:

Jamsetji appears to have decided that business was no longer his main business. The nation was his business. Slowly within him was developing a passion...His passion was to uplift the poor of the country.

In a letter written to Lord Reay in 1896, Sir Jamsetji wrote:

Being blessed by the mercy of Providence with more than a fair share of the world's goods and persuaded that I owe much of my success in life to an unusual combination of favourable circumstances, I have felt it incumbent on myself to provide a continuous atmosphere of such circumstances for my less fortunate countrymen...

[See: For the Love of India: The Life and Times of Jamsetji Tata, by R.M.Lala. page.92-93. Penguin, 2006.]

Sir J.N.Tata met Lord George Hamilton, Secretary of State for India in London and told him of his desire to see steel industry take root in India under Indian management. He told him that 

'when he first thought of establishing a steel industry two decades earlier, he was young and ambitious. He would have undertaken the task for his own sake. Now he was sixty, and more than blessed with all he needed for himself. If, at this stage, he undertook a project as major as this, it would be for the sake of India.'

Sir Dorab Tata, Jamsetji's son, said later about his father's interest in the hydroelectric project:

The acquisition of wealth was only a secondary object in life: it was always subordinate to the constant desire in his heart to improve the industrial and intellectual condition of the people of this country.

As R.M. Lala remarks:  "Jamsetji's conduct shows that in his later years he did not ask 'What enterprise is the most profitable?' but 'What does the nation need?'.

[ See: Beyond the Last Blue Mountain: A Life of J.R.D.Tata by R.M. Lala. Penguin, 1993. pages 43, 70 and 197.]

If any one wants to know what is vision in leadership, it is this.

 And the inspiration provided by Jamsetji is so powerful that it propelled the house of Tatas through all the subsequent years. It is showing results through all the enterprises the Tatas run, largely as trustees of national wealth.

J.R.D.Tata: Real  Bharat Ratna

The man who best exemplified this spirit in our times is J.R.D.Tata. He was the head of the Tata house for over half a century taking over when he was not fully thirty five. He saw the British imperialism ( which he detested); he witnessed the freedom movement ( with which he sympathised); he witnessed the dawn of freedom (in which he rejoiced); he experienced how senseless the Free Indian govt was towards national enterprises, and how brutal its taxation (which he suffered); he experienced how two supposedly  great PMs - Nehru and his daughter Indira, who between them ruled India for 34 years- laboured under leftist slogans without understanding- and without even trying to understand how private enterprises really worked, and formulated policies based on prejudices (which in vain he tried to correct);  he received rough treatment  from Morarji Desai both in Bombay and as PM (which he took in his stride); he experienced the contumely and arrogance of native bureaucrats who even out did the imperial hordes (about which he could do nothing) ; he withstood bullying and maltreatment; he stomached insults without retaliation. Through all this , he was motivated by only one factor: his love of India and his obligation as chairman of Tatas towards the country and its people.

In the so called socialist era with its system of permits-quotas-licences-contacts-contracts etc, many businessmen cultivated the ministers, MPs, wretched bureaucrats by funding  (bribing) them generously just for survival. The very netas who shouted Socialism by day gleefully spent the ill gotten wealth by night. Tatas stood alone. But they too had to support the Congress Party: a party which talked of socialism had no sense of shame in seeking money from the capitalists! [It was really like paying protection money to local goondas.]They lost insurance business. They lost the airlines which they had created and built up. They did not get licences for new projects or permits for expansion. They came very near to losing even the steel business to nationalisation. If they persisted through all this, it was because of J.R.D.'s commitment to the nation and its people, irrespective of what the government did.

Every businessman talks of shareholders. Some talk of employees. A few think of the society at large. Very few think of the country as a whole. Tatas alone think of all these all the time!

If in the world of Indian business, I can think of any one as the true Leader, it is J.R.D.Tata. No other industrialist  in India is even worthy of being mentioned in the same breath. There may have been brilliant CEOs engineers, managers, professionals.Surely, there have been good businessmen and companies. But there has been no other Leader.

Indeed, it is doubtful if any other nation has seen the likes of Sir Jamsetji and J.R.D.Tatas! They are India's own jewels.

65. LEADERS AND LEADERSHIP

65. LEADERS AND LEADERSHIP

ALL societies value and celebrate their leaders and heroes, though some may over do it.  While the popular idea of leadership seems to be associated  mainly with politics and public affairs, people are recognised as leaders in every walk of life. Societies differ in their perception of what constitutes leadership, but leadership as a concept and phenomenon holds sway in all.

Who is a leader? What is leadership?

It is difficult to spell out clearly what constitutes leadership. But it is clear that those recognised as leaders do display some marked traits. Academic authorities give out their theories. In the US, leadership is taken primarily as the ability to enlist the cooperation of others in accomplishing a common task. This is like a business school idea. But who decides what is a common task? Who articulates the needs?  

There are more elaborate theories which list the characters commonly found in leaders:

• superior physical ability
• superior mental ability
• superior ability to conceive of the larger picture
• greater skill in achieving specific/specialised tasks
• ability to accomplish the given task efficiently
• ability to manage a crisis
• set of values and traits such as wisdom.

Leadership: East and West

In the West, leadership is mainly associated with external accomplishment.[ Alexander, Napoleon , Churchill, Henry Ford, Kennedy, Lenin, Bill Gates] In the East, it is associated with great personal traits such as nobility of personal conduct, spiritual attitude and wisdom, etc. [Buddha, Confucius, Lao Tzu, Gandhi, Dalai Lama.]

3 ELEMENTS OF LEADERSHIP

Ultimately, I would say only three elements constitute leadership:

• vision/purpose
• ability to inspire
• ability to solve problems/achieve results.

All three elements must be present in a leader.

A statesman may do it in respect of public affairs; a general may do it regarding military affairs; an entrepreneur may do it in respect of business matters.

I personally believe that such leaders are born so. Education or circumstances do not create a leader: they merely provide the circumstance for the innate leadership qualities to manifest. There have been great leaders without formal education and who flourished in all situations.

It appears that it is more difficult for someone to be accepted as a leader in the West than in the East. The cult of the personality runs deep in the East. But once accepted anywhere,, the status is hardly questioned or critically examined. Critical review may reinforce the status as a leader or undermine it!

Winston Churchill : Self educated

Winston Churchill was a born aristocrat but was dull at/ disinterested in studies. He did not even take a university degree.But he was proficient in language, and keen on a military career. He made terrible blunder as Chancellor of the Exchequer, when in 1925 he restored Gold Standard at pre-war parity. He himself admitted, as great men do, that this was the greatest blunder of his life.. He was a die-hard imperialist. He joined the Army and was stationed at Bangalore for training. In the afternoons, while all the others rested and slept, he spent 5 hours daily, studying two books: The Decline and Fall of the Roman Empire by Edward Gibbon, and History of England by Macaulay. Subsequently, he covered the Boer War as a reporter in South Africa , was imprisoned and escaped miraculously. ( Churchill was accosted by a Boer soldier with his drawn rifle who could have pulled the trigger- but he didn't! He was Botha who became a General and PM of  South Africa later! ] In the 30s, he was constantly talking about the danger of rearming Germany. He was considered a war-monger. But when England was forced to enter the Second World War, it was Churchill who was elected Prime Minister and it was he who inspired a sagging nation to great endurance, sacrifice, and victory. 

To defend all that the British empire stood for!
Well, he defended England, but lost the empire!


Man of Destiny

But the same people who celebrated him as a leader during the War discarded him when  they found that his imperialistic ideas did not accord well with the times! Towards the close of the  War, he warned that Stalin could not be trusted, but Franklin Roosevelt disregarded his views. The world suffered the Cold War for four decades after that! Churchill was thus a leader for a limited purpose, for a limited but crucial time. Those who study his life cannot fail to notice that he was a man of destiny. It seems all his life was a prelude to this moment, preparation for this role. In nearly everything else, he was wrong! Great as he was in his own way, Indians have no reason to like him.

The big three at the Yalta conference- February,1945

John Kennedy
PT 109

So much has been written about John Kennedy- as leader, president, etc. Two incidents stand out- one before he became even a Senator, and one after he became President. In the Navy during the Second World War, he was captaining a boat PT 109. It was hit by a Japanese destroyer. The destroyer is a big ship, and slow moving, compared to PT 109 which is both small and much faster! That it got hit throws doubts about the captain's abilities! However, after the hit, Kennedy showed extraordinary qualities as a leader, spoke to the unit and led them to safety on an island,a few miles away, towing an injured sailor by clutching a strap from the sailor's life jacket in his teeth!

Lt.John Kennedy in PT 109, 1943

Cuban Missile Crisis

Kennedy as President did not do well in his encounter with Khrushchev at the Vienna meeting in 1961.  In fact, he cut a sorry figure against the more seasoned veteran. Then Khrushchev built the Berlin Wall! Kennedy could do nothing! But when Khrushchev tried to station nuclear missiles in Cuba, Kennedy rose to the occasion. Amidst all the conflicting advice he got, he decided to block the Soviet fleet and pressed the US Navy to blockade Cuba and intercept any Soviet Vessel! 

President Kennedy signing Cuba blockade- 23 October,1962

He had also taken diplomatic steps through UN. But like a true statesman, he provided a face-saving device for Khrushchev: he agreed to remove the outdated US missiles kept in Turkey!  Thus a world crisis was averted. Kennedy showed himself to be a leader in crisis, though we may also argue that the crises themselves were brought on by his inadequacies!

American and Russian vessels.
We students of history and international affairs had very tense moments! Today people cannot imagine that situation!

Friend of India?

Kennedy was a great liberal and he favoured India by sending out the great John Kenneth Galbraith as their Ambassador. Like Chester Bowles before him, he was a true friend of India, but could not get past the anti-India State Dept. Galbraith became very popular in India due to his scholarship , simplicity and directness. He was not a career diplomat and so had not to put on a mask!

Gandhi : was he a leader?

In India, Gandhi and Nehru are considered undisputed leaders. This is an uncritically accepted view. Today, nobody really believes in anything Gandhi said or did; ( not many people have read him, anyway,  to know anything about him) but to pay him homage has become an empty annual ceremony.

Charismatic Gandhi

Does Gandhi meet our criterion of leadership?  Not fully. He started his political life in India with a vision statement: this is explained fully in the small booklet he wrote in 1908- Hind Swaraj. But towards the end of the book, he says that he was not working for that goal right then! He had great ability to inspire people; it was an act of simple faith, like religious feeling. His austerity, his simplicity, his directness, absence of show, his real concern for the poor- all touched the common man. But more thoughtful people were sceptical of his methods, even while admiring his character. 

Gandhi's Politics: fiasco

But his record is dismal in respect of achievement. While he inspired people, he could not successfully conclude any of his Satyagraha programs( except Salt Satyagraha) All his political ideas ended in fiasco. Consider these:

• His programmes ended in Partition of the country
• Hindu-Muslim unity was not achieved. His actions generally weakened the Hindus.
• His idea of linguistic states has corroded the ideal of national unity
• His advocacy of Hindi as national language has made non-Hindi speaking people second class citizens
• His ideal of non-violence has been shown to be unsound and unworkable in practice.  He advised Englishmen not to fight Hitler- his own India fought 4 wars with neighbours!
• He was indecisive and incapable of providing effective leadership, especially in the late 30s and 40s.

Gandhi wronged Netaji! Unfair treatment.

Gandhi's Economics: brilliant and ahead of times

On the other hand, he had some remarkable insights into economics. He showed that industrial civilization was harmful. Today, it is accepted by all serious thinkers. He showed that life could be more simply organised. He showed that people could live without depending on government.He showed that life could be decentralised.  All these ideas are today encompassed within modern concepts such as 'sustainability', 'voluntary simplicity', 'small is beautiful', etc. But these ideas are still on the fringes; no country has adopted them as the standard practice.

Gandhi himself created/revived a parallel economy based on village and cottage industries and demonstrated that it could be done. This is no small achievement.
After Gandhi, the movement has sought govt patronage, subject to all the bureaucratic ways.

Woman weaving saree outside Vijayawada. Handloom weaving is perhaps the only truly cottage industry which still survives.

Unsound ideas on numerous matters

Imposed his will on others

Gandhi expressed his ideas on numerous matters. The more we examine them, the more we feel that he was not steady in his thinking. His ideas were unsound on many issues. He wavered at critical times. He suppressed other people and imposed his own will. He did not allow any organization under him to develop independently, nor did he allow any functionary any real freedom. Rajaji alone among his close associates had the courage to differ from him openly on vital issues, including the disastrous Quit India call. Gandhi was a dictator- as much as Stalin, though he appeared to be gentle. Only, Stalin swore by Marx, Gandhi by the still small voice- whose voice we do not know. 

Gandhi was unfair to Patel. He imposed Nehru on the nation.

Indecisive

If you read how he treated Subhas Bose, Sardar Patel you would hate Gandhi.  He had no respect for the earlier freedom fighters like Tilak, Sri Aurobindo, Bhagat Singh. Gandhi is an example of purposeless self-mortification which achieved nothing in the end. People hesitate to critically examine him because of his supposed martyrdom. People do not know that by then, Gandhi had been discarded by his own followers. With him around, the so called Congress leaders then were unable to come to any decision on any issue. Gandhi was the very antithesis of an effective leader.

 He could lead an Ashram, like a Jain muni; but he could not lead a nation. Nation cannot become an ashram. He has already become irrelevant in India- except for postage stamps, and providing picture for rupee notes! Not a single idea of Gandhi is followed  by any  govt after Independence.

Bharat Mata after Gandhi!

Before Gandhi, we had slogans of Vande Mataram, Bharat Mata Ki Jai. Jai Hind, etc. Gandhi came and the slogan became Mahatma Gandhi ki jai. Today, all such slogans are dumped! Gandhi made us forget Bharat Mata, and today Bharat has also largely forgotten Gandhi! And today in post-Nehru India, it is politically incorrect to say "Bharat Mata ki Jai"or even Vande Mataram. 

Nehru: greatness thrust upon him

Nehru is even less of a leader, on our criteria, though so much glamour surrounds him. Vested interests and dynastic rule have perpetuated his name. Yet, if you examine his life, you will find that:

• Nehru had no practical experience in any field- including law ( unlike Sardar Patel, Rajaji, Rajendra Prasad and others)
• He did not directly organise any constructive activity in the Congress (unlike Patel. Rajaji )
• He was circulating like a prince and it was his father Motilal who commanded respect for his personal sacrifice that secured for him a position of eminence by influencing Gandhi.
• His economic and political ideas were acquired when he was a student at Cambridge. He was not open to new ideas, nor was he able to re-examine and evaluate his old ideas in the light of later developments. Thus his mind did not grow and it was infantile.
• He had no faith in any of the beliefs and programmes of Gandhi. He did not implement even a single programme of Gandhi as Prime Minister.On the contrary, he was an admirer of the Soviet system.
• Majority of Pradesh Congress leaders chose Sardar Patel as Prime Minister. It was Gandhi who imposed Nehru. Nehru treated Patel nastily. Nehru became a dictator surrounded by sycophants in his durbar.

Oh! what a fantastic photo! From: Hindustan Times.

Blunder after Blunder

Now coming to Nehru's work as Prime Minister, we see that:

• He created the Kashmir problem, and it still persists.
• He adopted an economic programme that eventually led to a huge crisis in 1991- India became bankrupt on external account and had to pledge its gold to get international assistance
• He retained and expanded the huge bureaucracy created by the British, and he made it almost monstrous in powers, in the name of state control of economic life.
• He retained the administrative, educational and judiciary systems of the colonial masters and continued colonial style rule
• His external policies led to 4 wars with neighbours! India is surrounded by hostile neighbours!
• He created the linguistic states and thus destroyed the emotional unity of India
• His anti-Hindu prejudice gave the anti-Hindu slant to the concept of secularism.
• After the death of Sardar Patel, he became autocratic in nature and demonic in powers. He felt answerable to no one. He felt and behaved almost like a demigod. He discarded and disregarded old leaders and surrounded himself with sycophants and crooks like V.K.Krishna Menon. He was running like an old truck without brakes. It was the Chinese attack that halted him on his tracks. He lost his charishma, invincibility and even credibility.

One of the great defects of Nehru- which he shared with Gandhi- was that he did not have a genuine democratic temperament. He could not tolerate a difference of opinion within the party, and did not allow any other leader to grew and attain an independent stature. It was this which ultimately led to dynastic rule. 

It cannot be denied that Nehru was a darling of the crowds,at least till the Chinese aggression; but public adulation alone does not make a leader! Nor does such adulation wash off the mistakes.

The evil that men do lives after them;

The good is oft interred with their bones.

-Shakespeare.

This is from a speech of Mark Antony from the play Julius Caesar. This seems to be particularly applicable in politics. A bad decision by a popular figure can damage the country for long years- as Kashmir is proving. People who leave such legacies cannot be considered  leaders by any stretch of imagination!