It is a long and tough struggle up the greasy pole for a corporate leader. This is true even in sports, as evidenced by the recent cricket World Cup. In my experience, after reaching the top, it is tougher to stay up there. Two risks—arrogance and losing touch with reality—are common and the subject of much commentary. A third and more subtle risk arises from the challenge for the leader on his duty, goals and rewards. It is worthwhile to reflect a bit on these three terms.
Duty to all stakeholders: A leader’s duty is not towards only shareholders but towards all stakeholders. This subject has garnered rich commentary and insights in the public domain, so I feel relieved of the burden of amplifying the point. Instead, I recall a light-hearted but true anecdote from the 1970s. At the AGM of the erstwhile Tata Oil Mills, an elderly shareholder bemoaned the low dividend announced by wondering aloud what he would say to his frail wife. J R D Tata offered several approaches—meeting him after the AGM, discussing later with the CEO, selling his shares, and so on. The shareholder continued whining. Finally, in light-hearted exasperation, J R D said, “If none of these approaches is acceptable to you, then I might ask you to consider changing your wife.”
Another episode from 12 years ago comes to mind. Tata Chemicals had set its sights on developing a project on the edge of Lake Natron in the Rift Valley, Tanzania, to mine naturally-occurring soda ash. The company had spent several million dollars on pre-project studies. At this advanced stage, it received information that the project would disturb the natural habitat and nesting site of the little flamingo. The board scrapped the project and took the hit of a write-off in one quarter with transparent communication to shareholders. Stakeholder consideration rightly overrode shareholder gain.
Compartmentalise goals: Leaders must be strongly driven by business goals and lightly driven by personal goals; these can mix easily unless separated consciously. Perhaps four lessons from Indian traditional wisdom are worthy of recall: know yourself, protect your resources, serve others before self and act with compassion.
Unconsciously, leaders make disproportionate commitments to personal goals, which end up impeding the achievement of business goals. For example, among some startup founders, the drive to become personally wealthy by making their company a unicorn is overpowering. A premature initial public offering, unwarranted promises to investors, or undesirable levels of founder publicity might dominate the agenda of the leader to the disadvantage of the firm. It is possible that such a weakness affected Theranos and WeWork abroad, and Oyo and Byju in India.
In my experience, many business goals can be aimed for directly; however, some business goals, and for sure personal goals, are better aimed for obliquely. The principle of obliquity states that in complex systems, which are imperfectly understood and where the cause and effect have an unclear relationship, goals are best achieved when pursued indirectly. The reason is that the complex system changes its nature as we engage with it. That is why great leaders deal actively with those factors they can influence and let things that are outside their control unravel. That is why there can be two kinds of luck—earned and unearned.
Don’t obsess over rewards: The idea about matters that are outside your control makes a silent case for leaders to avoid setting their eyes on rewards. In the western discourse on management, it is natural for leaders to aspire for the rewards of their success. In the Indian philosophical approach, it is highly undesirable. Indian managers have difficulty in reconciling these contradictory approaches, having inherited the Indian ethos through their upbringing but having been schooled in western management pedagogy. It is worthwhile to read Ashok S Ganguly, former chairman of Hindustan Lever. A modern management leader and also a traditionalist, he makes this nuanced point in his recent book, Afterness: Home and Away.
A memorable narrative from childhood flashes in my mind. In 1951, 37-year-old Kurt Carlsen, captain of the freighter, the Flying Enterprise, encountered a life-threatening storm in the Atlantic Ocean. As duty demanded of the captain, Carlsen stayed on the ship till the last passenger had been safely evacuated. The ship could not be saved. Near the port of Falmouth, the captain jumped into the waters and swam to the safety of the shores. On the shore, cheering crowds awaited him with a hero’s welcome. He was offered $250,000 by a newspaper for an exclusive story. He was cold to praise and such adulation, insisting, “I did only what I was supposed to do.”
What reward did he want? He desired one more opportunity to command a ship. And he was given that job to captain the Flying Enterprise II. This narrative encompasses all the terms used in this article—duty, goals, obliquity and rewards.
Holocaust survivor Viktor Frankl wrote in his book, Man’s Search for Meaning, “Don’t aim at success—the more you aim at it and make it a target, the more you are going to miss it… Success will follow you precisely because you had forgotten to think about it.” How right he was.
R Gopalakrishnan
Author and business commentator. His fifty-year professional career was spent in Hindustan Unilever and Tata Group