We all agree that these are exciting as well as challenging times for business. Post 1991, many `protected’ businesses struggled to survive; new people entered the arena with new ideas, we witnessed new business models, newer industries emerged, competition increased, global giants entered Indian markets, Indian businesses went global. And before we knew the entire eco-system was polarized between dual challenges of survival and growth. Interestingly enough, leadership style typically used in these polar conditions was similar. Dominated by optimization, command & control, short term gains, tangible outcomes, being number driven etc, we became dwellers of the bottom and the middle of the pyramid.
Primary consideration at the bottom of the pyramid is security, survival; making money.
Predictably then strategic leadership shifted its attention towards monitoring, cost controls, consolidation, restructuring or somehow earning a quick return on the capital employed. Operations leadership got preoccupied with maximizing output with minimum input across all asset classes bringing in rigidity. `Poverty mindset’ plagued the business environment; even after generations of wealth, leaders wanted to work to earn more riches. While there is nothing wrong in becoming wealthy, but compromising values, ethics or long term vision and purpose is clearly myopic. With all energy diverted towards it, there is seldom anything worthwhile such businesses are capable of doing.
Growth is the focal point at the middle of the pyramid.
Leader’s ambition is the instrument of growth in most cases. History and mythology have taught us with a numerous examples of how greed leads us astray. The sheer number of scams in the recent past only supports that point. Growth hungry leaders seek power by all sorts of means and they keep that power concentrated. They end up creating mercenary organizations where the sole purpose is to make money, to grow, show more net profit than last quarter. These days there is another game of creating illegal personal wealth by showing losses in the books. Anyway, employees work mostly for money or opportunities for growth. Once those are gone, people leave for greener pastures leaving them bleeding. Investors also stick around only for money not for the real value or any larger purpose than return on investment. If you look at the entire relationship pyramid in IT industry you will find it to be completely `mercenary & fragmented’ (as per the framework created by Goffee & Jones). Such businesses typically spread themselves too thin by overdrawing from the market on the back of wonky projections and fail to get their assets to repay in time, cook up their books, burden internal systems so much that they start collapsing but such challenges are often ignored.
As a matter of fact, when businesses obsess over survival and growth, they tend to lose sight of their real vision and purpose. Focus naturally shifts toward the short term. And because vision is not clear, the purpose is neither ennobling nor inspiring; they fail to meaningfully engage their constituents, particularly their employees. It is the calling, meaning and high purpose at the peak of the pyramid.
Transformation takes place at the peak of the pyramid, nowhere else. We all want to do something bigger than ourselves, something great in our lives, we are looking for such causes we could associate with, we attempt doing good things in small proportions around but if business leaders could build that `noble good’ in their business vision, they are instantly able to elevate their people to higher levels of intrinsic motivation; hence achievement.
Leadership and cultures at the peak of the pyramid is transformational and elsewhere it is purely transactional. So strong is this transactional phenomenon that organizations invest millions in people processes such as engagement surveys, competency frameworks, development centres, R & R, employee friendly policies etc and still not make employees feel valued, powerful and inspired. Managing is in focus, not leading. And with that focus they don’t get too far and to avert that, they use more transactional styles of leading, thus get caught in a vicious cycle.
Organizations that fail to shift this focus from short term to long term, those who fail to appreciate the intangibles along-with tangibles or not be results driven as well as be relationships centric, process driven while being caring, may not survive test of the time. This shift from being transactional to being transformational, from bottom of the pyramid to the peak of the pyramid is India’s biggest leadership challenge.