'The larger-than-life CEO belongs to the past'

The focus at the NASSCOM India Leadership Forum 2008 was—as the title suggests— leadership. A sustained wave of overseas acquisitions and expansions in the Indian IT services and IT-enabled services (ITES) sector in the recent past also meant that a common theme echoing at the three-day forum held last fortnight in Mumbai was global leadership. It was in the fitness of things, therefore, that the topic of discussion at this year’s NASSCOM-Business Today round table was “Global Leadership: The Next Generation”. Five of the brightest minds from the IT and ITES industry got into a huddle to throw light on this burning theme. The panelists were Som Mittal, President, NASSCOM; Vineet Nayar, President, HCL Technologies; Kris Gopalakrishnan, CEO, Infosys Technologies; Pramod Bhasin, President & CEO, Genpact; and Peter Altabef, CEO, Perot Systems. Brian Carvalho, Executive Editor, Business Today, moderated the discussion.

BT: Good afternoon gentlemen, and welcome to this round table on Global Leadership: The Next Generation. It’s a valid topic not just for the IT/ITES sector  but for Indian industry as a whole. For the IT/ITES sector, global leadership assumes significance, given the opportunities and challenges that lie ahead. Let’s begin by trying to figure out how does one go about equipping potential leaders with the necessary knowledge, skills and tools to drive a company’s vision and meet its strategic objectives.

Pramod Bhasin: It’s a difficult problem. And it’s not only a problem for Indian companies. Global companies face the same issues. I think it’s too easy to get into the same mode most companies do— Japanese tend to send Japanese overseas (to start an overseas business), Americans tend to send Americans overseas, and Indian companies tend to send Indians overseas. And yet, that may not be enough to meet the purpose— which is to build a business locally. A new person in a new country has a very steep learning curve—despite being armed with a lot of knowledge from the parent. I don’t think I have come across either educational institutes or programmes that are really effective at explaining how to deal with the global issues of not just new economies, but, for instance, the cultural nuances that come along with them. From a limited vantage point, I would say the best way we could do it is to be more tactical, in terms of having people shared back and forth, having transfers of people, having modules that allow people to get accustomed to a particular country or culture; having very robust processes that measure success in those areas, and dashboards that allow you to measure success in those areas. You have to be conscious about who you hire—will they fit in, and are they adaptable to a global environment?

Vineet Nayar: What’s so different about the environment today than it was five years ago? I believe the three Rs have changed: The responsibilities are different, the response we want from our managers is different, and our expectations of results from these managers are different. Therefore, talking about just managing global leaders and inducting them into a global culture will miss the point. As you construct an organisation that is global in nature, localisation is important, but even more important is globalisation. That a global organisation is different from an American or a European or an Indian organisation is the point I am trying to make. What is this global organisation? A global organisation has to invert the pyramid of the organisational structure. It has to be more entrepreneurial. It has to create, what I call, the democratisation of organisations, where it is not people like us who are monitoring, managing and hence, correcting what others should be doing. But it’s about reverse accountability— that we are responsible to them to enable them to achieve their goals. So, there have to be some radical changes in the way we manage a global organisation. The other point is that if you run an organisation like an inverted pyramid, then issues like that of cultural integration are completely bypassed. That’s because your job is primarily that of an enabler… Rather than running your organisation in a military fashion, or in a manufacturing style, you run it in a more enabled fashion where responsibilities, responses and result expectations are clearly defined. In an enabling environment, you create communities of interest, you create collaborative platforms, you create sensitivity to global cultures… but you don’t intervene. At HCL, we have seen a large degree of success with this management style.

BT: Kris, what are the demands on leadership as organisations today—perhaps your organisation too—become bigger, more complex, more international, and face fiercer competition?
Kris Gopalakrishnan: The demands have definitely increased. That’s because changes are taking place much faster. And one needs to respond to these changes much faster. Having said that, when you look at leadership itself, you need to separate the leadership model, the leadership process—how you identify a leader, how you measure a leader, how you accelerate a leader’s growth—from what is transitory in nature. A typical organisation should start with a leadership model. Once you have that in place, then you say: Today, I need somebody to run Japan. Then you go back to your leadership model and describe the attributes required in a person who will run the Japanese operations.

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Given that the language is different, the culture is different, that it is a market with some different characteristics, you accordingly decide on the leader you want. Then you go about and figure out how to identify, select and integrate that person. When it comes to integration, you need to explain to that person that here, this is your goal, this is your business plan, this is how you will be measured, etc. Once that formal process is laid out, then it becomes easier for you to identify a leader and get him started.

BT: I think all of us in India are more caught up in this wave of Indian companies going international. But obviously the reverse is happening too. Peter, how was it for you when you came to India, purely from the cultural point of view?
Peter Altabef: It (a foreigner coming into India) calls for appreciation. And that applies to any geography you expand into: What is the sense of the people on the ground, and how do you nurture the people on the ground. At Perot Systems, over 30 per cent of our global workforce is Indian.

I do agree that you can’t take a person from one geography, put him in another geography and expect him to be at ease. On the other hand, I also do believe that leadership is fairly universal.

We have a slogan at Perot Systems: “We hire for character, and we train for skills.” The same is true for leadership. We look at how difficult it is to run a business in India— you look at the labour issues, you look at the logistics issues, you look at all the pressures involved—and what we have found is that people who can lead our Indian businesses can lead our businesses anywhere in the world.

BT: Let’s debate one of those universal leadership dilemmas: Why is it that many good managers do not succeed in graduating into great leaders, and why do some of the greatest leaders come unstuck because they get jaded?
Som Mittal: One big phenomenon in leadership today is that CXOs, CEOs and the like are much younger. So, in a very compressed time they are expected to pick up decisionmaking capabilities and leadership qualities that many of us took much longer to develop.

You hire potential leaders because of certain traits you see in them, but it is experience over time that makes them true leaders. And I think today the amount of time we as leaders spend with budding leaders is much less. It is important that we coach them, mentor them—in fact, share with them the experience that they do not have. Because they don’t have the luxury of time to rely on experience, learn from it and become great leaders. As current leaders we have to be story-telling, dwelling upon mistakes made.

If many good managers don’t become great leaders, it could also be because they’ve achieved things materially little early in their life. So that passion, that urge to excel isn’t there. We just need to keep creating challenging situations for them.

BT: In such complex times, would the concept of “shared leadership” make sense, as it appears to be getting more and more difficult for a CEO to know it all. Can responsibility and accountability be a collective effort?

Gopalakrishnan: To a great extent you need a team that will manage the affairs of a company, and whose members will be seen as leaders of an organisation. That’s because you need leadership at all levels. Everybody needs to be able to look at somebody close to them as their role model. Having said that, ultimately in business, after all facts are on the table, after all deliberations, somebody has to say: This is it. We will go with this decision. This is a must because sometimes we will not be able to go forward; for there could be situations where there may not be concurrence of opinion. Yes, you do need collective leadership, but ultimately there has to be one person to take the final decision.

Nayar: I disagree... The next generation of leaders has to be able to manage this next generation of employees who would shun hierarchies, who would shun strictures, who would shun discipline, who would want more value, more innovation and more collaboration. If that be so, unlike manufacturing, and unlike an army, the value in an IT services company gets created in the interface between an employee and the customer—not between CEO and the customer. And that interface is by far the most important in running (IT services) businesses. So the global leader does not only have to manage these people, who are different in nature, but he also has to realise that he is not the one creating the value, but it is the interface that is doing that.

Thus, in HCL, we have launched an initiative that’s called: “Destroy the office of the CEO.” In my mind, this whole CEO mantra as one who is a larger-than-life decision-maker, a visionary is something that belongs to the past. The younger generation and the next generation of business imperatives are about CEO accountability of making the enabling functions happen to create a collaborative environment, to create openness, to create a learning ground, so that people can create value at the interface where the leaders don’t participate. So, the relevance of leadership in tomorrow’s world is a question mark. And it moves away from this thought of a single man taking a decision to being more an enabler. And if you are more of an enabler, you will be able to create significantly more value. My belief is that of shared leadership or shared accountability— a more provocative word is inverse accountability, where the leader is accountable to his employees, which does not exist today. We believe in democratic values in our day-to-day life, but we don’t run organisations democratically. Reverse accountability, of a leader to his employees, will become a necessary imperative, and once it does become a necessary imperative, shared leadership automatically emerges. Shared leadership is not amongst 5-6 people but amongst teams.

BT: Let’s shift to another topic. You can arm a leader with all the competencies in the world, with all the knowledge, with all the tools, but how important is ‘emotional awareness’ for a leader?
Altabef: It’s critical and I don’t think it’s missing in the best leaders. There have been some studies that have said that 30 per cent of the value of a firm is created by the quality of its leadership. And 70 per cent of that quality is created by leaders being empathetic. I would say that it’s not just about leadership, or even business; people who understand their strengths and weaknesses, and those of the people they work with—they’re just more successful people.

BT: Som, is it important to be nice?
Mittal: I don’t think we have a choice… it’s often said that it’s lonely at the top. I disagree completely. I believe that if a CEO is willing to, and has the courage to, expose his vulnerability, then the amount of support he gets from his team is enormous. They don’t see you up in the hierarchy, behind a façade of bravery and charisma. Personally, I have seen people responding to me as a leader well in such circumstances, offering me support when I never asked for it. Now that’s a different kind of shared leadership.