Failure Of Indian Leadership Model

In the famous Hollywood flick, Gladiator Maximus famously said “Win the Crowd, and you shall be more powerful than the King”. Leaders don’t need official position of authority if people in and around you look up to you for ‘clues in crisis ‘you are a leader. A lot of trees might get cut for the paper work if we try and make a list of qualities an ideal leader must possess, here are few which I believe are of utmost importance. If a human brain looses self control, the same beautiful mind can be its biggest enemy and self destruction is eminent. So a good leader should be able to control his emotions and passions. You might not appreciate me using the word passion, as many entrepreneurs are passionate (almost all), and passion is the oxygen for excellence in entrepreneurship, but what is important is having a control. The emotional attachment towards success should be very less, this is because being a leader on will see failures, and I don’t know a successful man who has not seen them. If a leader is high on self efficacy he can get his team of the slump faster. A leader CEO/Manger can create value on long term basis only if he is passionate about his job but not too emotionally attached to what he has done or he is capable of doing (ego). Let us take case of Satyam Computers it failed because Mr Raju was attached to what he had achieved and feared that all that could be acquired if he showcases the real stuff, thus compelling him to cook the books from inside, let’s not forget he hardly gained personally from it. Emotional attachment stops one from taking decisions for larger good.
Leaders are neither born nor manufactured, they emerge. A good leader should be less individualistic in nature and more of a team-man. As truly said by lord Krishna ‘Hey Arjuna, keep on doing your duty, without expectation of fruits and victory shall be yours’*
Leadership (Management) Style’s across USA, Japan and India…
I used these two countries as its chalk and cheese when it comes to USA and India in terms of how companies are run, that does not mean it’s not all Smoke & Mirrors when it comes to running the Show in USA.
One clear difference I make out is in nature (the mindset), in USA people are very individualistic and the first generation entrepreneurs don’t focus much on legacy, they actually might not mind to hand over to professional Managers to run the show. If we talk about the Indian Large Business houses few names come to my mind are ITC, L&T, Gujrat Ambuja Cement, ACC the Murguppa Group and many more but we can actually count them, but in USA things are different.
I am not saying that Professional Managers create better value for shareholders or not, neither do we have enough empirical evidence, we have seen fiascos like Enron and World Com in the past due to larger than life ambitions of these CEO’s these companies met their destiny.
Talking about styles of managers/leaders major difference between styles of USA and Japan is the relationship between suppliers/vendors and companies are totally different. If we see the case of Auto Industry crippling with lack of fuel of liquidity currently, companies like GM and Ford try to create competition amongst the suppliers to get the best deal.
In Japan likes of Toyota and Honda go for cross holdings in the suppliers companies and make them part of the family and believe in long term relationship, also supporting them to develop new technologies and help them achieve operational efficiencies. And we all know what success companies like Toyota have scripted in world’s largest car market.

*Essence of Bhagvat Gita , but not the exact words.

Leaders

 Motivations of a leader:

 A leader does not need a management degree or any other kind of a degree to be a leader.There is ample evidence pointing in this direction. People tend to cater to the notion that leaders are born or created. As usual the truth is usually a mixture of the two.

 

 The first and most important thing about a leader is that such an individual is self driven. By self driven I  mean that the person is necessarily not motivated by external agencies. 

 

 Human actions in general are driven by needs , starting from the need of food to going upto the need for love and entertainment. While it is obviously untrue that a leader is not motivated by his own needs but  it is true that for anyone to be a leader he/she has to be atleast partly motivated by the needs of others.

 So we have spiritual leaders catering to spiritual needs of the masses , business leaders catering to economic (the need for activity) needs , military leaders catering to their military needs and political leaders for diplomatic needs etc..... Clearly an ideal leader has to read the mind of the masses and must possess an innate sensitivity to make this happen.

 

 The leader among men is driven then by the selfless wish to either alleviate the suffering of the masses or to bestow something of value upon them. Outstanding examples of  leaders of the first kind are Gandhi,William Penn,George Washington.Examples of leaders who bestow something upon the masses are Bill William Gates ,Dhirubhai Ambani, J R D Tata . These men have faught long hard battles to get something for many others even when they already had for themselves much more than they would ever need. Most of these are selfless people. 

 

 Their have been many politicians and many wealthy businessmen but history remembers a few as truly remarkable leaders. They left their mark on society not because they wanted to but because they cared about something which they knew was much bigger than themselves.

 Birth of a Leader:

 A leader is always born , not necessarily of  the womb ,but mostly of circumstance. Leaders are not made. No one can be 'made' a leader. Someone may be 'made' a financial analyst . Someone may be taught 'history' and given hands on 'business experience'. Someone may be trained to be a 'manager' of a business but no one can be trained to be a 'Leader'.

 

 Leaders are born of circumstance . If Gandhi was living at Mumbai  in 2001 and did not travel much he would not have much of a motivation to free a nation .He would probably have done something to alleviate poverty. Similarly George Washington living in the America of today might have been a good businessman. 

 The more dire the circumstance the greater the potential for a great leader to emerge. Examples that verify this are ample throughout history.

 Life of a leader.

 Not many agree but for a mind that is not in control of itself , power is its own mortal enemy.

Hence in general a leader among men must possess a fair amount of self discipline. This is not to say that he/she should be an ascetic. A good leader must be able to control his/her passions

and emotions.  Anyone who gets too emotional or is too attached to the outcome of certain actions will end up losing his/her mind and eventually leadership appeal. Thus the worldly life of a leader is a hard one. A spiritual awakening goes a long way in becoming more effective as a person and a leader. 

 

 The spiritually enlightened thus will be the most influential leaders. Remember that millions of people follow Christ and Buddha to this day.They  have been bigger leaders than any of their contemporaries . On the other hand there have been many Generals and business people and freedom fighters through the ages. How many from before 1600 A.D. do you know?

 This clearly says something about qualities of an ideal leader. In the current business world(Dwapara Yuga) he/she should be able to chanellize (control) his/her passion(emotion)

towards achieving success for a large number of (his/her) people by the measure of monetary benefit (employee benefit).

 

 Consequently a good corporate leader (CEO/manager)  can adequately assign monetary benefits to his/her shareholders and employees alike while satisfying customers fully as well,while him/herself being passionately unattached to what he/she does at a personal level

 

Conclusion:

Leaders emerge . Leaders are niether born nor made . A good leader should be passionate about what he does for others (his aim) while being detached to (not thinking about) the possible outcomes of his effort other than his aim.       

  

 

In Business We Think Big & Suceed Big

"Being different is what has made our country great. We have the freedom to think, believe and achieve whatever we set our minds to do. For that reason, we should set our sights on the big dreams we have for our careers.
With “golden parachutes” failing to open for much of corporate America these days, entrepreneurship remains a growing trend. It’s important that we keep finding ways to explore our ideas to the fullest and not dismiss them just because they may seem too grandiose.
Right now, the timing could be right for your brilliant idea and be just what your community, city, state or even nation needs. Google became a billion dollar business in just 6 years with just a very simplistic idea. Why not yours?
This is powerful confirmation; more millionaires were created immediately after the Great Depression in 1929 than in any other era in our nation’s history. If indeed history repeats itself, then we could be headed for another boom-time right around the corner. Keep your eyes open and your attitudes positive so you can recognize the next big opportunity that comes your way." - Donald Trump

PS: These are words of the Great management Guru Donald Trump. Their is no original contribution by the blogger in this post, its a privilege to have lessons in excellence given by Donald through this post.

Opportunity in Adversity

Opportunity lies in Adversity:
History has been testimonial to the fact that adverse times have been stepping stone to companies who have seized the moment and made it big. Economic turmoil creates more opportunities for companies to move into position of a leader from a laggard position. A study done by Bain & Company that analyzed the net profit margins and sales growth of more than 2,500 companies clearly indicated that 24% more firms moved from laggards to leaders in the 2001 downturn compared with the subsequent period of economic calm. Also around 20% of those in the top quartile of financial performance (based on Net Profit) in their sectors dropped to the bottom quartile during the period.
Corporate India has navigated through rough weather exceedingly well, and almost through an era where doing business was a crime, and when India had a more socialist outlook. In the year 1998-99 Cement Industry was going through some tough times, and Gujarat Ambuja cement was not immune from the crisis, instead of retreating into a shell, India’s then fifth-largest cement maker by sales acquired an ailing Modi Cement Ltd, taking advantage of the target’s low valuation. It then turned Modi Cement around. Today, Ambuja Cements is India’s second largest cement manufacturer by profits, and one of the country’s most efficient cement producers. Thus indicating the fact if calculated financial risks are taken one can get into leadership position.
Let consider the case of Intel, it was an organization built in a recession ( to the stature we see it at); Advanced Micro Devices Inc, its rival in the chip business, prior to the 2001 recession had made heavy investment in product design and this strategy was paying off, with AMD’s top-line growing three times faster than that of Intel’s. Then the recession hit, catching the entire industry with too much capacity. As AMD’s lack of profitability prevented it from investing in capex, Intel seized the advantage.
It invested in new facilities with state-of-the-art production capability and spent heavily to advertise its P4 processors. In coming years the cost proposition of Intel was much better than AMD, and AMD had to axe 15% of its workforce. The momentum AMD had built quickly vanished and Intel emerged as undisputed king of the Chipset business.
How can Indian companies take advantage of turbulence and a slowing economy, as Intel did? First, they need to realize that conventional approaches often don’t work. Many industry leaders fall from the top during downturns or turbulent times because they assume that a strong market position is an insurance policy against trouble. That approach breeds overconfidence.
The better approach: slow in, fast out — like a good driver heading into a sharp curve. Winners in turbulence tend to brake quickly heading into a downturn by managing costs carefully and consistently. They focus on what the company does best, reinforcing the core business and spending to gain share. That allows them to speed up at the top of the curve, when the economy starts to turn for the better.

PS:
This post is inspired from the research done by Bain & Company. I would personally like to thank Mr Vivek Gambhir and Darrell Rigby, a Bain partner in Boston and the head of Bain’s Global Retail Practice

Innovation Liberates

Fiction liberates and Reality educates, and if we don't learn we don't evolve.. Innovation and adaptation and most importantly acceptance are the key to chest of Doom, in which we find ourselves locked. Jobs being slashed right , left and center uncertainty and hope lingering heavily in the Air, what should we do....Or What can we do...Are we responsible for Sins of few aspirational (for lack of a sophisticated word)Investment bankers...We ask ourselves why should we suffer?
But if we check the History one fact is accentuated... the entire community pays for actions of one Aspirational (Greedy/Maniac)Leader. We can cite millions of examples from Jangeis Khan to Adolf Hitler, to Osama- Bin laden and few bankers.I believe herd mentality to earn profits of few basis points and follow the leader spelt the dooms day.
Yes you may argue i don follow the herd.. i am different..I think differently.. But there lies the catch we as a human race are excellent thinkers and less of doers.. as it takes courage to swim against the tide.
But History has been testimonial to the fact that great leaders and Change agents who have the tenacity to seize the moment emerge as strong leaders.
And in the Indian context i appreciate the proactive measures taken by Dr Subarao to tackle the situation,some thing that was never done and was never thought of, reminded me of situation when Manmohan Singh was the Finance Minister, and when he took decision to pledge Gold Reserves and Open the Economy. True these decisions are not taken by a single man, but men having vision can influence Bold decisions. Yes Call Money Rates were as high as 20%.. but taking action in all three fronts was a bold and appreciated move. Hard decisions seldom don't come with a pinch of a salt...
But these decision are key ingredients to as i said seizing the moment.
If India is able to weather his storm ( and this Sub-prime Crisis is one Perfect Storm seen once in Century)it is poised for emerging as a strong leader.

Financial Turmoil

A school boy doing his Physics assignment due to his curiosity and over influence of news Channels asked his father, “Dad what do you mean by Sensex ?” , father being aware of financial crisis replied , “ Son something that falls faster than 9.81 m/s2 “. This may sound dramatic, but in past few weeks we have seen this some chain of events in which big and Historic names from the Wall Street are getting wiped out, Investment banks are falling like Domino’s.
The Big American Investment Banks are changing their models, and turning into commercial banks, and as we sit on the couch and sip our cup of coffee, we tend to feel is this the failure of the Big American Capitalist Model?, or just the greed on side of Investment Banker’s, who for sake of few basis point profit took exposure in products having fancy names but high risk. As time passes by the speed of Write-off’s and big names going belly- up would stem. And then the ‘subprime crisis’ might spread its wings into the Real Economy.
But we are safe and sound 12,000 miles away in our living rooms watching Saas-Bahu Soaps, are we? The Decoupling theory was put to bin by the screen as, Dow had a great Bow to four digit figures and Sensex tested the 10K levels, which were seen two years ago. Initially when we saw a correction in the markets it was due to capital flight on behalf of FII’s due to high risk formation in Emerging Markets, and now the same FII’s are pulling back the capital employed in EM’s just to meet there obligations abroad.
So the big question here is that can Corporate India sustain is growth and help provide the fuel for India to keep shining? I have my reservations on this issue, and got reasons for the same. The Recent IIP (Industrial Index for Production) numbers don’t quite reflect it. Services Sector is major contributor to India’s growth, and IT & ITES sector has a lion’s share of it, major revenue for this Industry comes from the BFSI in USA and Europe, which has been hit badly, yes we can argue Rupee has depreciated a lot , boosting the bottom-line of IT companies, but there top-line will be affected as the IT spending( by the existing players who still survive) will reduce eventually. If we talk about manufacturing industries, they need fuel of capital to fire them, which they are finding it difficult to raise from the Equity markets as of now, and the cost of borrowing has also gone high , so debt funding goes out of the Window. The worst hit is real-estate and Infrastructure which are abandoned by all investor, once a darling of all had turned orphan. Textiles could have benefited, from the lows of the rupee but again the weak consumer spending in USA and Europe may not let that dream suffice.
The Analyst on D-Street are screaming about cheap valuations, we use PE multiples which in a way is a technique of Relative valuation, and we compare PE ratio of our scrip with Industry PE and that of market leader, but one thing we should take into the picture is the interest rate in the system.Historically PE ratio had a negative co-relation with the Interest rates in the system*. The ability of a firm to generate earnings is a function of interest rates. So when the interest rates in the system go high the earning expectations tend to go low, and on those expectations the share price, so investor should keep in mind as he PE falls the futuristic earning will also not grow at the same rate.
There are some positives to take as the Global cut in the Interest rates, and reduction in CRR by the Central bank, but these measures are temporary & inflatory in nature. The Big Bail out and provision of liquidity for banks in USA and Europe is a good news, but now after this subprime saga the banks would be very cautious (for lack of a better word) in lending, which again might be a roadblock on track to happy days.

*The following Study at NYU exibiting a strong negative co-relation between the two. http://pages.stern.nyu.edu/~adamodar/pdfiles/pe.pdf

Leader......

Our biggest Strength lies in understanding and more importantly accepting our biggest weakness. We as individuals never do that, do we ever? . We all have limitations, limitations are nothing but caps on our abilities. Hey isn’t that negative putting Caps or limitations on yourself, yes true  its bad to put any blockages or hurdles, but trust me your ability can just take you to ¼’th to your destination, the rest is attitude , grit and determination, any of the word that is convenient to you. So what am I trying to say? , I believe you have that grit and street-fighter attitude, its great but at the same time know your limitations. The best success story that comes to my mind is that of Steve Waugh.

Steve & Mark Waugh were one of the very few twins who played together in a team sport. Cricket and especially batting came easily to Mark, he was a naturally gifted fielder, and one of the most attractive & stylish batsman of all times. Watching him you felt cricket is an easy game, on the contrary Steve struggled and fought his way through, he was technically not that superior, and was by no means a natural or gifted cricketer, still his track record is better than brother Mark, he had evident weakness like an ordinary player of short-pitch bowling, strong bottom hand player forced him to be more often than not on back-foot. Still he bailed out Aussies out of loosing situations the maximum number of times, due to sheer grit and will to win.

Steve had this unique ability to get the best out of his team mates, and he built the Australian team, which Ponting  just inherited. History has been testimonial to the fact that most of individuals with common abilities make extraordinary leaders. Daimen  Flemming once said, ” if Steve thinks I can walk on pile of broken Glass, then I can!”, this was the sort of faith players had on Steve. During 1999 World Cup Australia was on verge of elimination from tournament, and then Steve made the famous comments  to his mates“If not You, then Who? If not now, Then When?”… and as they say rest is history.

  And I have my assumptions for this, if you are supremely talented you are too focused on perfecting yourself, and in the process neglect the team. For instance, Tendulkar, Lara both living geniuses’ still didn’t proves their metal as a Captain. Moreover I you are a perfectionist you expect the entire team to do the same or be at the same level, whereas your team might have different styles or competencies which you might overlook.

Same is role of a Manager, his role in today’s environment has become much of a leader than, just another brain doing analysis. There are specialists for the same, there is always an upper limit on what you can achieve, but the realms of achievement for your team are infinite.

 

Love Your Work!

Real motivation comes from within, real drive comes from within we always try to derive inspiration from others, we read success stories, all of us love a story of an outright underdog who pushes himself to glory.
The key for success actually lies within you, and it’s the journey and not the destination that is more important. “We all are looser in some way or the other”, is what one friend of mine use to say always, he was of the belief the coolest guy in the college is a looser at something or the other and that’s what pushes him to be cool. A nerd pushes himself towards books because he believes , books are the only thing that will make him successful, so is it fear what helps us to push ourselves, fear , fear of failure , fear of not being popular, fear plays a crucial role in motivating us.
Wait a minute is it right, should fear motivate me? Or passion motivates me?
I leave this question to you, but if one thing for sure if fear does motivate you, you don’t enjoy things, you don’t enjoy the journey called life, whatever you are is just because of that two letter word ‘what if?’
Man is a social animal, and trusts me you hate it or love it, deny it or accept it we have herd mentality, if someone says something is good and you just accept it “ hey is that good, good for me?” this is a question we seldom ask. To cite an example I don’t have to go too far away in my b-school every Tom Dick, Harry and Sally wants to be either an Investment Banker or wants to be an Equity Analyst. Without even knowing what it is all about?
It’s Innovation that liberates and not imitation, I came across another sect of people, who sincerely believe success is a function of GPA, and there is this elite class of people who walks with their head held high and are immortals in the campus. If we have to run a regression equation its simple one depended variable is their academics, on which their life depends. And these immortals also include list of people who have worked over the years in corporate, but I don’t blame them since they have been groomed in the similar environment. Then there is a breed of people like me who totally believe that formal education and set patterns can upset you, as you are caught up in Shackles’ which you can never really break, and stops you indulging in innovation. By saying that I am not advocating my beliefs and saying there should be no diligence and there should exist complete chaos. No method to the madness is must, but let’s has madness at the first place; I always say that there is a pleasure in being mad, pleasure which few big mad men know. And Madness stems from passion, passion to learn perform and innovate.
Coming back to drive and motivation I believe that one should do whatever he or she loves to do,” it’s easy to say that, stakes are high, I got liabilities up my sleeves and for me money is the key”, I totally agree but I propose a hypothesis that , hey if you are not good at something and if you don’t do something with passion you will never outperform in that field, in that job, rather you join a field which you love and are passionate about, your success probability increases. Myopia is a shortcut to disaster.

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