PURPOSE & IMPACT

Author: Tojo Eapen (page 1 of 10)

Leadership Framework – ‘Leadership House’

I’ve been following leadership frameworks over the years. Leadership frameworks are quite interesting to study because they tend to highlight the critical elements and expert thinking about effective leaders and leadership.

This new framework shared in IMD (Switzerland) seems to reinforce the fundamental elements and bring together nicely (with case examples).
According to the article, Patrick Flesner who developed this ‘Leadership House’ framework, has experiences in top-level sports, roles as a partner in prestigious German law firms, leadership position in a publicly traded company, partner in a venture capital fund and author. Probably, bit of the European context as well.

Selected Notes:
* The Leadership House is built on a solid foundation of trust. Trust provides a strong feeling of safety. In trusting relationships, it’s about the issue, not the person.
* A strong team is the first pillar. It’s about more than hiring the right people and putting them in the right roles.
* Having the right people has two dimensions: the first is functional fit and the second is cultural fit. A strong culture is a competitive advantage and separates the best teams from the rest.
* Purpose and vision are important but almost always intangible. It is vital to clarify what must be done to achieve your company’s vision and turn it into reality. We should invite team members to the goal-setting process and ask them about what they believe must be done to turn purpose and vision into reality. In this way, our team members will become the owners of the goals and do whatever possible to achieve them, which is psychologically very powerful.
* We must ask our teams to translate shared goals into “joint plans”. We must show what each team and its members must do (and, importantly, deliver in terms of results) so we achieve our shared goals. Joint plans are more granular and make execution possible.
* Team members are held accountable for both the tasks and the results they achieve. This is why it is so important that joint plans also show the results to be delivered.
* We can only hold team members accountable if we empower them.
* Without execution, there are no results; without results, there is no effective leadership. Execution is where leadership shifts from theory to practice, yet it’s often where leaders struggle the most. One of the key challenges is finding the right level of involvement – too much oversight risks micromanagement, stifling creativity and independence. Too little involvement leads to confusion and a lack of direction.
* No leader has all the answers, and that’s fine. Leadership isn’t about knowing everything but about creating the conditions for your team to find the answers together. In life and business, outcomes depend on external factors, and, often, a bit of luck. What we can influence and control is building a great team, setting it up for success, and working together toward shared goals.

Source:
I by IMD; The Leadership House: Building solid foundations for leadership and business success; Patrick Flesner; 18 November 2024

Middle Manager Reality Check

Image Source: Robin Higgins, Pixabay

Middle Managers often feel “sandwiched” and frustrated in organizations, especially during changes. Recent studies indicate further reduction in the number of middle managers in organizations.
How do middle managers navigate successfully, manage selves and stay increasingly relevant in a fast changing/evolving world?
Organizations also need to tread cautiously with a longer term perspective and focused work on changing mindset and culture, as they plan changes.

These are selected notes, interesting data from a couple of Korn Ferry articles – Where’d My Manager Go? (LinkedIn), and A World with No Managers? (Korn Ferry website).

* Last year, in a sign of the aggressiveness with which firms are removing them, middle managers represented 31.5% of all layoffs, and an average of 22% between 2018 and 2022.
* And when middle managers depart voluntarily, they are not being replaced, which creates a void in leadership.
“If you cut and cut and cut, but don’t change mindsets, you can accelerate vertical hierarchy,” says Mark Arian, CEO of Korn Ferry Consulting. “You can end up in a bit of a death spiral.”
* In theory, trimming the middle layer can strengthen workflows: Autonomy and decision-making extend downward, and customer responsiveness improves, along with accountability and morale. But “that doesn’t necessarily happen”. In practice, sometimes authority coalesces at top levels, leaving underlings awaiting signals.
* But experts say today’s middle managers are under unprecedented pressure. Half are burned-out. Thirty percent are too stressed to support their teams, according to employees participating in LinkedIn’s Workforce Confidence survey.
* Experts advise firm leaders to proceed with great caution. “When you get rid of middle managers, the margin for error becomes minuscule.”
* Rather than making deep cuts, experts advise piloting studies of new organizational structures.
* Experts advise training teams to be inclusive and knowledgeable about the expertise and leadership of each trainee.

In my observation and personal experiences, during most times after the organizational deep cuts, the vaccum between the top and front line grows leading to major communication gaps and frustration among team members. Top levels of the organizations do not end up having sufficient time to manage the increased demands and need for attention. For those reasons, it is extremely important to work on workforce culture and mindset changes proactively, in order to ensure better readiness. Most times, there is a mad scramble after the quick cuts are implemented. It is also important to think about the inter generational shifts in the workplace and related impacts.

Is Being In HR Getting Tougher?

McKinsey recently shared an interesting discussion regarding how the HR function’s own stress is showing. This is a very relevant and needed discussion because during most times of intense changes, HR members also feel exasperated and in a thankless role (referenced in a recent New York Times article). They feel caught in between, and hit from all sides. Many HR professionals can relate to this discussion, based on their own experiences.

One differentiator for great HR professionals and leaders is that they take the time to reflect, process, learn from the challenges and figure out ways to work through them proactively with a growth mindset. This discussion is valuable food for thinking for not just HR professionals but also for all key stakeholders.

Here are some highlight notes for me from the discussion.

* Research reporting that 35 percent of HR leaders surveyed don’t believe their management team cares about their mental health.
* The HR function lives in the friction between caring for the employee and caring for the organization. 
* Organizations need to understand the importance of partnering with their HR colleagues and engaging them early when they’re thinking about strategic changes. The earlier you engage your HR business partners in those conversations, the better it is for the organization.
* When it comes to capability building, we need to be thoughtful about what we put on HR versus the rest of the enterprise and ensure that people leadership is a joint capability.
* It’s very easy to add things to the portfolio of trainings, surveys, and information gathering. It’s a lot harder to stop doing things. So creating and building that muscle and challenging the status quo is something that every organization needs.
* As an HR leader, I can bring joy if I can be my authentic self with a team that is excited to work with me and views my input as a real contribution. 
* If my day-to-day is going to be more joyful, more energetic, and more fun, then I am working with people I like and respect who like and respect me. And we’re engaging on some cool topics together, making our organization a better place.
* Sometimes HR is the messenger caught in the middle.
* Over time, the administrative side will likely become easier or more automated. However, there is still an unbelievable need for a human element that can translate even self-serve tools to help a colleague in need.
* Trust is hard earned but can go away in a second. And it can go away in a second because of HR but also, unfortunately, because of business leaders. It’s important to be thoughtful in those moments. The unified voice helps build trust, but a little division amplifies quickly across teams and organizations. If leaders understood that impact, they might choose their words differently.
* We also need to build trust within HR. HR has to stick up for HR, too. And everybody has to own the full agenda. We need everybody in HR to speak up. Otherwise, you may build immediate trust but undermine trust in HR as a whole.

Source:
Why being in HR is getting tougher—and how to break through; November 1, 2024; McKinsey & Company







Learning To Deal With Failures In Startups

I came across a very relevant and interesting opinion piece in the Business Standard today, titled “Startup Fever” by Ajit Balakrishnan.

Some important notes from the author that got me thinking:

“…what gives me sleepless nights is that in India, amid all this clapping and cheering abouts startups, at policy making level we need to dive a lot deeper into the startup process…

Statistics from the United States and India show that nine out of ten startups don’t make it; ie. only 10 per cent survive and prosper.
A further analysis shows that 20 per cent of startups fall apart after a year, another 30 per cent close down within two years, 20 per cent shut their doors within five years, and the remaining 20 per cent dissolve within ten years…
Which conveys learning to deal with failure in a startup venture appears to be as important, if not more important, than learning to celebrate success.

…Statistics reveal that the most important reason for failure among startups is that the product/service created does not appeal to the market (market fit).
Second – initial funds startup had at its disposal are used up too quickly.
Third – failing to hire the right people. The founders should complement each other’s skills.
The final reason for failure – something that could happen in the environment beyond your control but damages your business…”


The opinion piece starts with a reference to an individual suicide scenario, potentially of a startup founder.
Our world tends to celebrate only the few startup successes. Is there a way to cherish the learnings and journeys of those that fail?

Startup founders and teams live through constant high stress and pressure. It is critical to work through the challenges together as a team, and build a healthy internal environment that supports each other during times of both success and failures. The impact of leadership mental and physical health could roll over into many areas, including health of the organization. Don’t leave people hanging, and share graciously during success as well. In the larger context and meaning of life, the universe seems to have a way of balancing. There are various aspects of the organization that can be analysed and improved.

External support networks and the systemic support could be game changers for leaders who may feel lonely. Sometimes, for those who have not faced any previous major failure in life, a major failure like this can be debilitating. Finding ways to cherish the journey and experience, relationships, building personal and organizational resilience (including learning to work through failures), and connecting the dots to larger context (seeing it as part of evolution) can add to the meaning of work and life.

This also reminded of a famous quote from Steve Jobs.

You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something—your gut, destiny, life, karma, whatever”.

About Fear And Resilience In Organizations

Content Credit: BiancaVanDijk (Pixabay)

I wanted to share some useful notes from the book, “The Psychology Of Fear In Organizations” by Dr. Sheila M Keegan, a Chartered Psychologist, and Fellow of the Market Research Society and Bath Business School. A lot of these play out in organizations every day and it helps a lot for leaders to be aware.

*Business psychologist and coach, Chris Welford identifies five telltale signs of a fear-based culture.
1. There is a preoccupation with status and conformity, and where rules have precedence over common sense.
2. Distinct in-groups exist and there is little opportunity to cross the boundaries between them.
3. Everything is measured but nothing is questioned.
4. Appraisals are only ever one-way.
5. The accent is on pace but short-term gain is known to be at the long term cost.

…Not surprisingly, in a fearful working climate, employees tend to mirror the behaviour of their managers. Management over-control generally has the effect of discouraging risk-taking, squashing initiatives and dispelling creativity and novel thinking.

… Feeling fearful, threatened or undermined at work can have a major effect on our work performance, as well as on our mental and physical health. Fear impacts our relationships with our colleagues and managers. We bring fear home with us…

How To Develop Personal Resilience, A Critical Element For Working Effectively Through Fear
…On a personal level, developing resilience is an ongoing process that involves a mixture of adjustments. Resilience can be developed by:
* having supportive work networks and healthy relationships.
* focusing time and energy on things we have some control over, rather than expending energy on aspects that are outside our control.
* actively looking for opportunities for self discovery and broadening our perspectives.
* practising cognitive restructuring: changing the way in which we think about negative situations.
* paying attention to our body as well as our mind, paying attention to one’s own needs and feelings.
* keeping a long term perspective, and considering the broader context.
* taking decisive actions.
* maintaining a hopeful outlook…

These are only few perspectives on a much broader topic.

Remembering Mahatma Gandhi 

On Mahatma Gandhi’s 155th birth anniversary, we remember his life and wisdom.

We continue to live in times of high uncertainty, violence and wars threatening to spread. As much as everyone likes to focus on their own world/environment, we live in a more interconnected world, and the impact of good and bad outcomes will be felt wider.

Is it becoming increasingly difficult to wish for a world of peace and harmony?
Are we speeding up our Doomsday clock/own extinction?
How could we get out of a vicious cycle of violence?
—-

* Blessed is the man who can perceive the law of ahimsa (nonviolence) in the midst of the raging fire of himsa (violence) all around him. We bow in reverence to such a man by his example.
* Gandhi objects to violence because it perpetuates hatred. When it appears to do ‘good’, the good is only temporary and cannot do any good in the long run.
* Gandhi feels that violence is not a natural tendency of humans. It is a learned experience.

Satyagraha, the Centre of Gandhi’s Contribution to the Philosophy of Nonviolence
Satyagraha is the quintessence of Gandhism. Through it, Gandhi introduced a new spirit to the world.

What is Satyagraha?
Satyagraha (pronounced sat-YAH-graha) is a compound of two Sanskrit nouns satya, meaning truth (from ‘sat’- ‘being’ with a suffix ‘ya’), and agraha, meaning, “firm grasping”. Thus Satyagraha literally means devotion to truth, remaining firm on the truth and resisting untruth actively but nonviolently. Since the only way for Gandhi getting to the truth is by nonviolence (love), it follows that Satyagraha implies an unwavering search for the truth using nonviolence. Satyagraha according to Michael Nagler literally means ‘clinging to truth,’ and that was exactly how Gandhi understood it: “clinging to the truth that we are all one under the skin, that there is no such thing as a ‘win/lose’ confrontation because all our important interests are really the same, that consciously or not every single person wants unity and peace with every other”.  Put succinctly, Satyagraha means ‘truth force’, ‘soul force’ or as Martin Luther Jr would call it ‘love in action.’

“The weak can never forgive. Forgiveness is an attribute of the strong.”

Source: https://www.mkgandhi.org/africaneedsgandhi/gandhis_philosophy_of_nonviolence.php

Quick Evolution Of Skill Demand In Jobs – Data Analytics, AI, ML

India is already among countries with the greatest demand for data analytics from the workforce, around 17% of job postings already looking for data analytics skills.
Looks like the India job market is evolving fast, even in comparison with rest of the world. This also holds valuable food for thinking for the education ecosystem and how much/how well they cater to these requirements.

The snapshot above is from the Business Standard (based on data from Cornerstone) yesterday.

With all of the data push, there is an ever increasing need for focus on quality leadership, management practices and processes, and employee health and well being.

Importance of A Healthy Work Environment and Related Practices

There’s been a lot of attention and discussion related to the unfortunate recent death of an employee in a large company in India, related work environment and practices. The fact that this is being shared, discussed heavily on social media and the media, indicates this topic has touched many people deeply.

* As business founders, leaders, managers and HR professionals, it is important to be proactive in ensuring healthy work environments in your organisations. This includes the focus on work, organization culture, policies and practices, leadership behaviors, health and wellbeing of your team members.
* All of you have important, shared responsibilities which impacts lives of your employees and their families.
* Doing nothing or staying silent never helps and most times, silence encourages toxic behaviours. Psychological safety is a core element of a healthy work environment. At a minimum, it is critical to initiate constructive discussions/dialogues with the long term interest of your people and sustenance of your organisation in mind. Do not brush the uncomfortable discussions away. Start with few fundamental steps that may hold high impact and visibility. Figure ways to manage stress proactively, actions to take when the red light indicators show up (they will show up in some form). When groups of managers and leaders work collectively with their support teams, get support and help (internally or externally), things will improve.
* In larger companies, it’s easier to lose sight of individual cases and stay hidden. The stress threshold levels can be different for individuals. Team members play a key role here in identifying, awareness and support.

Don’t let toxic elements/aspects linger and grow till it becomes too late.

For many leaders and organisations, the key learning here is to be proactive and not wait for worst case scenarios (irrespective of direct or indirect causes) to play out.

On the other side of the coin, many professionals and companies have high ambition and drive (that’s normally the path to quick growth) but that needs to be balanced with the constant reminder that the work is similar to a marathon, not a sprint. One needs to be prepared for the marathon. The growth process, and speed will be continuous and one needs to adjust the pace. Companies always are in a race to keep growing. The alternative is gradual decline. It is very important for the individual employee to be equally focused and responsible for safeguarding one’s own health and well being – to ask for support when needed, get help and figure ways to stay healthy physically and mentally. If the organization culture is not supportive, find personal ways to stay healthy. If that doesn’t work still, it is completely okay to find another workplace that works better for you.

The role of leaders in ensuring a healthy work environment is critical.

Chairman of multiple companies, and former CEO Douglas Conant recently said, “Surprisingly, I find that I cannot say it enough.”
…” leadership comes from within, from our humanity. We cannot be “artificial” in any way in our leadership; we must be authentic, true to ourselves, and true to the people with whom we live and work.”

There is a need to reaffirm, remind constantly about the fundamentals of a healthy workplace, and the critical role of positive, healthy leaders. When people spend most of their lives at the workplace, that could make a huge difference.

Notes on India Executive Compensation – from Deloitte India 2024 Rewards Report

Interesting notes on executive compensation from Deloitte’s 2024 India executive performance and rewards survey report. Noticed a related discussion on ET TV. According to Deloitte report site, their survey covers information from over 400 companies across all major sectors.

In general, executive compensation continues to grow, and evolve fast with the market. Senior leadership roles come with much higher complexity, risks, stress and decreasing tenure. All the more reason for CEOs to have sounding boards and coaching support.

According to a Mint analysis of data from the past decade (2020), a CEO or MD of an average BSE 500 company stayed in the role for 3.4 years. Fewer than half of Indian CEOs completed three years in office. The tenure varied with industry and women were underrepresented. The global average for the world’s largest 2500 companies during 2004-18 was 5 years (PwC study).

Regarding age, “in NSE-500 companies, a typical Indian CEO today is 57 years old (roughly similar to Fortune-500 firms, where the average age of the top executive is 57.7 years). For the mid and small sized companies, the average age of CEOs comes down to about 50-52 years.”

Notes from the Deloitte 2024 report:
* About 45% of S&P BSE 200 companies (excluding PSUs) witnessed a change in their CEO incumbent over the past five years.
Almost six of every 10 new CEOs have been internal promotions. Amongst homegrown CEOs, business heads or CEOs of other group/parent companies were chosen to be the successors. In case of external hires, 81% of the new external CEOs were sourced from the same sector.
* About 3 of every 4 CEOs in India now earn more than INR 5 crore [approx. USD 596,000].
* Faster increase in promoter CEO compensation compared with professional CEOs.
* Average CEO compensation in India stands at INR 13.8 crore [USD 1.6 million], up 40 percent compared with pre-COVID times.
* Fixed pay for promoter CEOs now constitutes over half of the total pay. For professional CEOs, pay-at-risk (Short Term Incentives + Long Term Incentives) is much higher at 57 percent of the total pay.
* Companies assess CEO performance holistically but largely link only financial performance to incentives.
* The prevalence of stock options or ESOPs dropped from 68% to 49% over the past five years despite more companies using LTI. Larger companies with more mature compensation practices are adopting performance shares faster, in line with global best practices.
* The wide gap between median and average CEO compensation [INR 9.3 crore versus INR 13.8 crore] indicates the wide range of compensation numbers and some outliers on the higher end.
* After the CEO role, COO and CFO roles continue to command the highest compensation premiums (followed by CHRO role).

References:
* Old is gold, but new-age cos…; Feb 6, 2024
* The average Indian CEO lasts less than 4 years…; Mint, Updated Oct 2020
* Deloitte 2024 Executive…Rewards Survey Report; Apr 2024

Recent Notes From BCG on Corporate Transformations

Recent data from BCG on corporate transformation and link with total shareholder return(TSR) hold valuable food for reflection.
We see transformation initiatives in most companies nowadays, especially when leadership changes happen.

Selected Notes from the article:

* The empirical patterns of transformation are quite stable: At any point in the past 20 years, roughly 30% of companies significantly underperformed their sector for a period of multiple years, making transformation a necessity for performance reasons.
* Successful transformations are the exception, rather than the norm, even when measured on very modest criteria. Only 26% of corporate transformations successfully created value in both the short and long terms. More than 70% of companies fail to outperform their industry peer group average in both the short (one year) and long term (five years), after a previous performance downturn period (numbers quite similar to the findings in 2018 report). Sustainable value creation through transformation remains so rare.

* Pre-emptive transformations create significantly more value in the medium and long run.
* A leadership change during a transformation is associated with higher TSR performance over the five-year time horizon. The positive impact is even higher if the new leadership comes from outside of the company. However, a change in leadership is not a guaranteed success driver.
* You cannot cut your way to greatness: differential growth is critical to sustained value creation.
* Achieving sustainable growth and a future-proof operating model requires entering transformations with a long-term orientation, rather than merely focusing on addressing performance woes or catching up to peers in terms of technology stack or organizational best practices. Beyond mindset, culture, and metrics, a long-term orientation also means investing in the exploration of new ideas that could be the basis of future advantage.
* Putting a formal transformation program in place, scale of the program and the willingness to invest in change matter. Formalizing the transformation entails defining a clear governance and process-or setting up a dedicated transformation office-for coordinating and tracking progress on change initiatives, as well as regularly communicating it to the executive leadership team so that roadblocks can be addressed promptly. Moreover, it may mean putting in place a chief transformation officer to helm an ambitious change effort, which our prior research shows can improve transformation odds significantly. The role must be designed appropriately and filled by someone who is persistent, vigilant, and flexible—and who is trained for the job.

Source: Five Truths (and One Lie) About Corporate Transformation, April 12, 2024, BCG

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