It is important to understand the context of the world that we live in and do business. It is best described by what Lenin said during the Russian Revolution in 1917, “There are decades where nothing happens; and there are weeks where decades happen.” We live in a VUCA world—volatile, uncertain, complex and ambiguous, where change is the only constant. The only predictability that we have is that it is going to be unpredictable. This was the state of the world even before the current Covid-19 pandemic hit us. For us to decide how we are going to manage and lead businesses, we need to go back to some of the mega trends that started happening before the world hit the pause button with the Covid crisis.
The first big one was the rising inequality, which has become a big issue across geographies in the world.
The second was a resources-stressed environment in which we operate. There is a huge amount of concern about whether we are being responsible in the way we manage our natural resources and look after our environment.
The third is the return to tribalism and protectionism. People are retreating back into their own communities, regions and geographies. The Covid pandemic has not helped in that.
Then we have this double-edged weapon called technology, which on the one hand makes life much easier but on the other, creates disruptions in the way we work and conduct business. We have to manage the impact of technology on employment.
In the current pandemic, people are obsessed with two things: one, about business continuity and the second, of course, is the discussion around the timing and the shape of the recovery that is going to take place. People talk about V, U and K shaped recoveries.
We can draw solace from the Sanskrit expression, “Neti, neti”—found in the Upanishad—meaning, “neither this, nor that; in other words, nothing is permanent in life—neither the good times nor the bad times. This Covid crisis too will not last. Instead of speculating the shape of recovery, we can focus on what will remain unchanged and what will change, post-Covid. This has been best described by Dave Hollis, a Disney veteran and now a renowned coach and writer: “In the rush to return to normal, use this pandemic time to consider which parts of normal are worth rushing into.”
The most important dimension of growth is responsible growth. The role of business is changing and you have to recognise that business has to be part of the solution to the world; to the communities that we serve.
I have EIGHT LESSONS for leadership in turbulent times. These lessons remain the same—pre-Covid or post-Covid. Some of them have been tempered by the pandemic crisis that we are going through currently. These eight lessons are not necessarily in the order of importance.
Lesson 1: No Growth, No Future
A wise person once said, ‘Growth solves most problems; more growth solves the rest.’ A business has to continuously focus on growth irrespective of the times you go through because growth means business as usual. Any business that takes its eye off the growth ball may not have a future.
There are many dimensions to growth. There is, of course, growth in terms of expanding your business but at the same time while it is business as usual on growth, it always has to be business unusual on costs and profitability. Because if you don’t invest, you can’t grow; you cannot invest unless you generate a surplus; you cannot generate a surplus unless you are prepared for every eventuality and in a volatile world, it is so important. While you continue to ask yourself, ‘How do I want to grow?’ you also have to ask yourself, ‘How do I prepare myself for the worst case scenario?’
Here is the interesting thing: Growth and profit are two sides of the same coin. Both require one very important ingredient: innovation. People often think of innovation as producing some really jazzed up products and services. But Clayton Christensen, the innovation guru who teaches at the Harvard Business School, perhaps gave one of the best definitions of innovation. He says, “Innovation is doing things differently to create value.”
In any organisation, there are people who work in the front end. There are people who work on product innovation and those who support this. You need in any organisation both poets and farmers—those who think about the future and those who are doing things today but doing things differently. Growth is a multi-dimensional thing. It is not only about growing and expanding your business but also generating surplus, irrespective of the scenarios.
Lesson 2: Stay Relevant to All Stakeholders
The most important dimension of growth is responsible growth. The role of business is changing and you have to recognise that business has to be part of the solution to the world; to the communities that we serve. Hear the voice of your customers, communities and employees all the time. If you lose touch with that voice and don’t have your ear to the ground, you will find yourself out of business.
Lesson 3: Execution is Strategy; Strategy is Execution
People often treat execution as a side act and strategy as a more important aspect of business. Strategy is a very simple thing. It is about making choices. The critical aspect is execution. I am reminded of a Hindi saying, ‘it happens when you do.’ Nothing happens if you don’t do.
Often we forget as we become leaders that just having the big picture is not enough. You must not only have the ability to paint the big picture but you must also have the ability to spot the pixels. So, pixels and big picture both are important if you want to be successful in today’s context.
Lesson 4: The Medium Term is Dead
It is now all about the short term which is managing the here and now and managing the long term, which is to create a destination for yourself, a sense of purpose in terms of where you want to go. Why is short- and long-term important but not medium-term? In a world that is so turbulent and uncertain, managing the here and now—what I call business continuity—is mission critical.
But at the same time, when you navigate in choppy waters, you should not lose sight of your destination. Otherwise, you may land up in a place that you don’t want to land. So the short term and long-term destination are important and the rest have to be managed dynamically.
For the medium term, you can put together plans. As long as you are rolling them every quarter, every year, such plans are not going to be much used.
Lesson 5: Every Company is Now a Technology Company
You are a creator/ enabler of technology or a user of technology. There are no exceptions. The sooner we understand this reality, the better it is. Tesla is not a car: It is software on wheels. Tesla is not the only example. Even more conventional businesses must recognise that unless they use Digitisation and Technology, they will never be able to make the right kind of decisions. Data has become the most important thing for our business. It is really critical that every business embraces technology either as an enabler, a creator or a user of technology.
Lesson 6: The Importance of Horizontal Culture
Mark Twain said, “Don’t let schooling interfere with education.” If I can paraphrase that, ‘don’t let organisation structures get in the way of growth.’ We make ourselves too complex in organisations. Horizontal culture is all about organizing for outcomes and agility. The idea of hierarchical organisations is so outdated. You do not need interfaces and coordinators in an organisation. You need them only to broker peace between verticals and silos. Today, you don’t need silos.
I am reminded of one of my dear colleagues Mr AC Chakraborty, who unfortunately passed away. He was a tough taskmaster and Hindustan Unilever’s Garden Reach factory General Manager. It was one of the most important factories that we had. I was a branch manager in Calcutta and one evening, we sat for a chat and Chakraborty decided to teach me a lesson or two.
He told me, “Harish. I think you will be going far up in this organisation, and I want to tell you something. The most important people in our organisation are only two sets of people—those who make soap and those who sell soap. Everyone else is an overhead or an indirect.” That was a simple way of giving a complex but a very right message.
Organisations basically need to ask themselves, “Where do we deploy our people—at the front end where we meet our customers or at the back end that enables making profit on a sale?” When I became the COO of Unilever, I kept this very important lesson in mind. No matter which country I went to, I asked one question, “Tell me, what percentage of your resources is deployed in the front end and how much is deployed at the back end?”
The point I am making is: The more interfaces you create, the more difficult it becomes to take decisions and you lose agility. In the London metro, every time you land up in a station, they say, ‘mind the gap.’ They refer to the gap between the train and the station. In organisations, interfaces are the gaps in between the matrices. You don’t need those interfaces. So go for horizontal culture and organise around outcomes and agility.
Lesson 7: Caring is a Competitive Advantage
You have to create a caring organisation. Caring has two dimensions. The first dimension is that you have to build people and constantly renew their license to operate. To put it simply in organisational terms, you have to make sure that you always up-skill and create the right capabilities in the organisation.
Why is that important? I was brought up in Hindustan Lever as a marketer. Hindustan Lever is well known for its marketing. But I have no license to operate as a marketer today because where people buy, what they buy, what people watch have all changed. Unless I am tech-savvy, unless I know how influencers and social media work, I can’t be successful now. A 737 pilot cannot fly a Dreamliner. Continuous learning and constant upgrading are so important. That’s called caring for people and building an organisation.
The second dimension of caring is that you must take care of people in a crisis. A lot of companies distinguished themselves during the Covid crisis by ensuring that they kept their employees above all else. You don’t get a second chance to make the first impression. Demonstrate to your people that you truly care.
Lesson 8: Leadership Matters
Much has been written about leadership. The leader, a CEO or Unit Head has two main roles. One, the leader has to give energy to the organisation and two, he/she has to manage the corporate reputation.
You give energy by creating a purpose which is larger than the business that you do. You have to create a purpose-led organisation. People don’t work for you because you sell a bar of soap or talcum powder. They work because they see a larger sense of purpose. The leader has to unleash energy by his persona. There are some leaders who will walk into the room and you feel energised and want to do anything for them. There are leaders who suck energy out of you. Be the leader that can give energy. When you interact with your team, give energy and don’t take away energy.
The second role of a leader is to manage corporate reputation. It is so important to set some non-negotiables. All of us think that our job is to tell people what to do. A lot of my job in senior positions was to tell people what not to do, about non-negotiables and things that they have to walk away from.
As you go higher and higher in the organisation, you recognise that being purpose-led and values-driven is an absolutely critical part of leadership.
As you go higher and higher in the organisation, you recognise that being purpose-led and values-driven is an absolutely critical part of leadership. In today’s context, reputations take years and decades to build. People still talk fondly about Pond’s, but it took years of leadership—thanks to people like the V.Narayanan, V Balaraman and others who worked on it. But with a click of a mouse, that reputation can be destroyed if you do something that doesn’t agree with the society in which you operate.
So, to summarise my eight lessons, successful organisations of the future will consistently manage the paradox of the short and long-term. They will always manage for growth and profit, but responsible growth will be an important part of that growth metric. Shareholders are very important but stakeholders are even more important. Being purpose-led and values-driven is mission critical. Jim Collins, the guru of management, wrote a best-seller called, “From Good to Great.” With all due apologies to Jim Collins, I would say that the companies of the future will go from being great to good. They will produce great financial results and performance but they will also be good companies for the societies they serve.
That brings me to Nari (late V Narayanan, former Chairman and MD of Pond’s India). He exactly epitomises this ‘great to good.’ Here was a leader who produced great business results but above all, he was a good human being. If you want to be a great leader, be an officer and a gentleman like Nari.
What are the most important lessons that many leaders have learnt during the last 15 months of the pandemic?
All the eight lessons that I talked about are lessons from the pandemic. If you ask me to pick two, the No.1 lesson that leaders learnt was: Caring gives a competitive advantage. The second one is managing the ‘and… and’ paradox. You have to manage the short term and you have to manage the long term. You have to manage the crisis of the pandemic and at the same time, think about managing the organisation beyond the pandemic.
How is leadership in turbulent times different from that in normal times?
Businesses have to learn to be more agile and must be able to turn on a dime in turbulent times. Equally important is that they must have clarity about the destination.
How can we advocate diversity, inclusion and equity in organisations?
D&I is non-negotiable and companies that do not understand this have no future. A lot of our people come from different backgrounds and there are talents everywhere. If you want to expand the pond in which you fish, with no pun intended, you have to embrace diversity.
Which is the most important change that you brought in Hindustan Lever?
In everything that I achieved, I cannot say that I was responsible. Several good things happened during my tenure—partly because I did not stop them from happening and mainly because, I was part of a great team. I was a professional manager and not the founder of the business. As a professional manager, my job was to build leaders bigger than me. Many of my team members today are bigger than me. As you go higher in the organisation, it is the right questions that you ask which are more important than giving solutions.
What is a leader’s best asset? What is your leadership style?
The leader’s best asset is integrity and authenticity. About my leadership style, you should ask people who worked with me. I believe that I am a good team player—whether I am a follower or a leader.
Harish Manwani, Former CEO, Unilever and Senior Operating Partner at Blockstone