A pessimist is not a good
leader, as the post-Enron US business community is beginning
to discover, but equally problematic is wild optimism that
can lead to a form of hubris too often seen in booming economies.
Yet, while pessimism was once a feature of India business
leadership, it is now hard to find, with new leadership more
grounded in a mix of dreaming and staying true to ideals.
The wild optimism that so characterised America
in the late 1990's and before that the IT boom and Japanese
bubble has seemed to miss most Indian business leaders, at
least from their public utterances and examples of judicious
decision making in the face of a world of opportunity.
One call to leadership from former US president
Bill Clinton sums up this mood: "We all need to find
as few demons as possible and as many dreams as possible".
This seems to have been very much the driving
force for K V Kamath, chief executive officer of India's second
largest banking and financial services organisation, ICICI,
who is seeking to transform ICICI into a top global bank -
but with a difference.
Kamath's leadership strength shines through
when he discusses ICICI's future, "We believe that to
break into the top league of global banks, ICICI will have
to follow a course that few banks in the world have done
and that is, leverage the rural economy."
Now leveraging the rural economy is something
most bank leaderships have shied away from because it is hard
work. Easier banking profits are to be found in the cities
or overseas. But Kamath is staying true to ideals while pursuing
growth with a clear eyed vision: "Our challenge is to
invent a new business model where we can create a distribution
base effectively in 600,000 villages in India, and to learn
to do that at one-tenth the cost of urban India."
So instead of looking to build a massive and
costly branch network that would never survive, Kamath and
ICICI have turned old banking on its head by seeking out local
partners who can incorporate banking services in their existing
activities. It seems simple, but much of good leadership is
the ability to see the wood from the trees.
But before ICICI could scale up its rural lending,
it needed to cover risk and again Kamath led his business
against conventional thinking which had it that because
the Indian rural economy depended so heavily on the monsoon,
lending was too risky. Instead of taking "no" for
an answer, Kamath found that the lending risk to rural India
was insurable, could be sold to farmers and further that it
could be reinsured outside of India so risk was properly spread.
By going against conventional wisdom, ICICI had a rural lending
model that he believes can be taken to 600 million people.
The interesting thing here is that the transformation
of ICICI has been carried out by the management team that
was already there, not by imported solutions. As Kamath puts
it "To build a successful business, you have to be able
to pick entrepreneurs very early and get them embedded into
the business. They need to go out into the ecosystem, demonstrate
their abilities, nurture the business and build it up.
Kamath's dream of building the new business
is based on the experience of this success with his team and
"the ability to empower people and to let them grow the
business. That will be exactly the same way we are going to
build this new business".
How does this change via management work? "You
need alignment of interests for a team and a strong belief
in your ability to execute. You need a can-do attitude."
Kamath has had to recruit a lot of people over
this time and looks for five characteristics: intellect or
a high level of competence; entrepreneurial leaders who can
pick the right team; a can-do attitude; the ability to withstand
shocks without getting flustered or losing direction, and;
ability to focus, focus, focus without getting diverted from
the core business.
In that sense, Kamath is one business leader
who clearly sees that the dreams of his business depend on
the people in it and in the process he has not tried to recruit
clones. He is also clear that leadership incorporates the
ability to correct your course when things start going off
track because, as he says, "things never happen quite
the way your models may have predicted". And he sees
the job of looking out to see when things do go wrong as resting
mainly with the CEO meaning the good CEO really needs
the ability to see across the whole business at the one time.
If one key measure of leadership is ability
to adapt to change, then Bangalore-based Wipro, India's third
largest software exporter, with annual revenues near $2 billion,
faced such a need when high profile CEO, Vivek Paul, left
the company. Azim Premji, chairman and managing director,
Wipro Corporation, immediately saw that the business needed
to get closer to the customer and to empower its team of talent.
He led the business further into a new era (already begun)
as a series of "verticals" or sub-companies, each
facing the customer and in an autonomous way.
With the reorganisation, Wipro "tried to
bring leadership closer to the customer". To do this,
they de-layered the organisation and empowered business leaders.
But Premji is an advocate that you do not demolish
as a "cash-cow business" in pursuit of your future.
This means the company looks after the mundane annuity side
of business while simultaneously exploring new businesses
so that the company's image as a "partner" is contemporary.
His company sets out to build managers who integrate
two opposing skill sets - technical understanding and managerial
skills. To get this, Wipro spends a lot on selection and training
of people. Training has two levels, first, campus induction
training and technical training at the beginning, combined
with training in leadership and soft skills. This leadership
training is provided at the entry level and continues as the
person moves through the tiers of management.
But a clue to Azim Premji's success can be found
in his approach to leading people to achieve more "We
give people major responsibilities even if they are only 60
per cent ready. Our experience is that people are pretty elastic
when you give them responsibility, and they just grow rapidly
with the job."
Leadership qualities that are sought by Wipro
include customer orientation, strategic thinking, self confidence,
commitment to excellence, willingness to groom other leaders,
working effectively in unstructured environments, adaptability,
handling ambiguity and ability to work in teams.
Both Wipro and ICICI see their future
leaders as developing from within. Clearly, as I have written
before, to be successful on a global scale for the year 2020
and beyond requires Indian companies to fast track the growth
of their home grown management skills and leadership abilities
to operate confidently anywhere in the world rather
than recruiting so-called imported solutions. I have a feeling
this is an approach Mahatma Gandhi was urging when he said,
"You must be the change you wish to see in the world".
Manallack: communication consultant, professional speaker
and trainer. Stephen is the author of You Can Communicate
(Pearson 2002). He is on the management committee of the Australia
India Business Council.