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The positivity leadership

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V Narayanan, former Chairman of Pond’s India Ltd was an inspiring visionary. He built a culture of character and competence and inspired ordinary people to do extraordinary things in the businesses he helmed. The Second V Narayanan Memorial Endowment Lecture instituted by well-wishers and Pond’s veterans was held recently in memory of Late Shri V Narayanan.

Mr Jerry Rao
Founder and Former CEO, Mphasis

The old theory that people are born leaders is simply not true. It was a very clever theory that was useful for aristocrats, monarchs and industrialists in the olden days to perpetuate their position. This is not a genetic trait like height or weight or diabetes. It’s a learned trait. The second thing we know about leadership is that it is situational. No person is a leader in every situation. When you are on a plane, the captain of the plane is the leader. If there is an emergency, you have to follow the pilot’s instructions. Leadership is not something like ‘a man for all seasons’ kind of story.

A Moses and a Joshua

The third thing about leadership is it is derived from situations. We need different kinds of leadership for different situations. This is where Mr V Narayanan set a great example. According to the Bible, Moses is the leader chosen by the God of the Hebrews, to bring the Hebrews out of Egypt. Then Moses dies. There is a new leader—Joshua, whose job is to take them into the Promised Land. I think the underlying message in the myth of The Exodus is that in different situations, we need different leaders.

Leadership a learned skill. It is situational. It means that one has to change one’s leadership style in different situations.

In the area of politics, the British public actually understood it. Winston Churchill may have led them through the war. But the moment the war was over, they defeated Churchill and gave the power to someone else. If Churchill had been re-elected, I don’t think he would have given India Independence in 1947. There might have been a violent insurrection and all kinds of problems. The British public were clever. They changed the leader, knowing that the situation required a different leader. So, leaders are not born. Leadership a learned skill. It is situational. It means that one has to change one’s leadership style in different situations. In the German army, they used to have different generals for offence and defence. Heinrici, for instance, was one of the greatest of German generals. His specialty was all defence. Nobody has heard of him like they have heard of Rommel or Guderian. It doesn’t matter. He was the best in defence. There are some who can do both. Narayanan was one of them. He was able to straddle multiple situations and multiple challenges.

Learn and Unlearn

Why are some leaders able to do that? Let me now move from science to the art. Till now, we looked at the research on leadership. We know that it’s not DNA driven and it’s situational. It has to change as per the situation. How does one change for situations and transform oneself from a Moses into a Joshua?

According to ancient Tamil poet Thiruvalluvar, a leader must learn flawlessly, unlearn and get rid of the dust in the brain and apply what he/she has learnt. Learning and unlearning are part of a leader’s evolution. The skills that will be useful in defeating a country militarily and the skills that will be useful in negotiating with the leadership of the country about freedom are two different skills. These are two different situations.

No knowledge will be useful, which is purely theoretical. We all, as managers, must understand that there is no point in knowing theoretically and doing nice PowerPoint presentations, if we cannot use them in practice.

License, MRTP and FERA Chains

Someone like Narayanan epitomized the art of excelling in theory and practice. He was a CEO and MD at a time when the Indian manager was in chains, tied between industrial licensing, MRTP and FERA. You had to operate with your hands and legs all tied up and at the same time, keep up the organisation’s morale. You had to keep your customers happy and brand values intact. You had to make sure that your market share didn’t go down and there was customer delight, managing products with an extraordinary brand history. You had to be faithful to the brand legacy.

It was a very difficult task. Narayanan and at least a dozen other people of that generation of managers managed that. Think of just one challenge they faced. You had to go and tell your foreign investor, “The Indian Parliament has passed some law. I know you people have been operating in this country for many decades. But we are going to dilute you, using a share price which is totally unfair to you. We are going to bring you down to 40%. But don’t worry. Be patient. Hang in there for ten or twenty years. We will continue to do business and over time you will recoup.”

Can you just think of the challenge? I am certain I would not be able to do it. But at least half a dozen managers of Narayanan’s generation did it. Navigating FERA, MRTP and Industrial Licensing was as difficult as Moses trying to bring Hebrew slaves out of Egypt.

It was unthinkable before 1991 that two foreign companies will be allowed to merge or one foreign company will be allowed to buy the equity of another foreign company. All that under FERA were impossible. Then suddenly things changed. The controller of capital issues went away. This required a different approach. Very few managers have been able to straddle different time periods. Narayanan was one of them. To go back to the myth of The Exodus in the Bible, he was able to be a reasonably good Moses and a very good Joshua.

Charisma is not something inherited. It is acquired. It is as much about leaders as it is about followers; research is still going on about the contribution of followership to leadership. Narayanan was a charismatic leader because of his qualities and achievements.

Charisma—Leaders and Followers

In all leadership studies, you will find a lot of mention of the expression ‘charisma.’ Charisma comes from an old Sanskrit, Persian word. It talks about miracles and magic. In the paintings of early Christian saints in Greek orthodox and Catholic churches, there will be a sun around the head of the saint. That is the Charisma itself. That is a holy touch given to the saint.

Charisma is supposed to be very central.

Charisma is not something inherited. It is acquired. It is as much about leaders as it is about followers; research is still going on about the contribution of followership to leadership. Narayanan was a charismatic leader because of his qualities and achievements. It was also because of people like Balaraman and Atul Vohra as his followers, giving their leader that charisma. There is a symbiotic relationship. That is why enduring organizations have both great leaders and great followers.

There is no such thing as a great leader without great followers. The best example in the last 150 years is Mahatma Gandhi. A good leader like Narayanan encourages and programs their subordinates to succeed and better their leaders in what they do. People who are insecure and scared that their subordinates will outperform and replace them can’t do that.
I think Narayanan started in sales. He never compromised on customer satisfaction and customer delight. He was obsessed with the fact that Pond’s vanishing cream or Dreamflower talc or some of those other brands had extraordinary association of customer satisfaction.

Selling the Backwater

In those days, for a variety of historical reasons, Cheeseborough Pond’s was headquartered in Madras (now Chennai), which was a bit backward those days. All the big companies were in Bombay and a few dying British companies were still in Calcutta. It was very difficult to attract talent to Madras.

Narayanan had the unique ability to convert that into a positive. He sent a subtle message that Madras might be a backwater but one could learn more and do better than going into the big ocean and getting lost. Since he had credibility and high integrity, the message got through. Instead of complaining, he changed the challenge into an opportunity and an armament in his armoury.

I was also a big supporter of making Madras a big centre for banking operations. We were able to attract a lot of people. I had our credit card marketing head office in Madras. Then I convinced HTA, our advertising agency to transfer one of their brightest people to head HTA Madras. He later went on to head their India operations and take up prestigious roles.

According to me, the managers of today must take interest and play an active role in the community. It can be sharing of knowledge, associating with management organisations like MMA or contributing to the community in other ways. They must grow beyond the company.

Mr Thyagi Thyagarajan
Former Regional Director & SVP, GlaxoSmithKline, Asia Pacific

I first met Mr Nari (Mr Narayanan’s nick name) when I came back to India after a stint in the UK. I joined as a special assistant to the Managing Director. It took some time for me to settle back into India. I decided to expose the company, to talk to people from different backgrounds and different industries and see what we can do with that knowledge, the pharmaceutical industry being pretty insular. They get very special in many ways and I felt important for the company to be exposed.

My boss at the time was one Mr Humayun Dhanrajgir. He was a classmate of Nari in Lovedale. He suggested to me to consider inviting Nari for our first talk and I got in touch with Nari. He came to Mumbai and spoke about the Pond’s story. It was a mesmerizing, captivating talk delivered in typical Nari style—precise and factual and yet, underplaying his role. It was a phenomenal story though, which resonated with everybody.

Power Packed Independent Director

After the talk, he spent a few minutes with me and asked about my background. He realised that I was Pond’s Balaraman’s classmate and I could straightaway connect with him. He joined our board. I joined the board of Glaxo India in an executive capacity and he came in as an independent director in a non-executive capacity. He did that role for close to 20 years. This is before the company introduced ceiling on tenures. I had 20-odd years with Glaxo as a board member.

Nari was instrumental in requesting Mr N Sankar, who was Nari’s very close friend and Chairman of the Sanmar Group, to induct me onto Sanmar Group’s Board. As a board member, I met him over 100 times and had the opportunity to interact with him many times.

On the very day, I joined the company, there was an ominous signal for me. The government amended the Act for drug patents and also withdrew the Drug Price Control Order (DPCO). These were two important events in the history of Indian pharmaceutical industry. I had to manage with my hands, feet and everything else tied.

At Glaxo, we wanted a high-quality board, not to supervise us, but to give us advice and from whom we could learn how to navigate in a highly regulated industry like Pharmaceuticals. Since we had a heavyweight board with people like Deepak Parekh and Nari, we were able to persuade our parent company to look at India as a special case and to view everything from the product portfolio angle and that we had to be different including on pricing.

Retaining Indian Colour

Jerry mentioned about foreign companies being asked to reduce their share holding to 40%. We did that and when we had the opportunity, we were able to persuade our parent company to go from 40 to 51 and more recently, in the last few years to 75%. One of the advice I gave to our parent company in the UK was not to go for 100% because the fact that we were 50 or 75% gave us an Indian colour. We will be seen as an Indian company amongst the MNCs.

We were able to do that because we had people of the calibre and integrity like Nari, who were able to persuade the foreign investors that India was worthwhile. It’s always a longer term with India but it is a rich country of a billion people and for a healthcare company which has the vision of being a global company, how could you not for prioritize India? We are able to have that understanding with the parent company. That was thanks to the role the independent, non-executive directors played. I saw Nari do that. For every board meeting, he would come fully prepared. He would read the minutes from top to bottom, underline the key points and would ask probing questions, always in a constructive way. As an independent director, Nari was influential beyond measure. For many people, being on a Board is a prestige issue but not for people like Nari. When we asked him to join our board, the question he asked was, “Why do you want me on the board?” He wanted to act as a sounding board and help us navigate the tough times. I have always seen the independent nature of the board as a positive and not as a body that is trying to put a spoke in the wheel and obstruct the CEO’s plans.

Following Nari’s Footsteps

Later on, when I became an independent director in a couple of companies, the model I had in mind was that of Nari’s. He was a person who could serve any board, even if he didn’t have the domain knowledge of the industry. He would make it a point to be very well informed and educated on issues pertaining to the industry. From the questions he asked, you could never guess that he was not from the pharmaceutical industry.

So having a board with capable non-executive directors of the calibre of Nari was a great advantage. When Mr Sankar invited me to join his board in Sanmar Group, I participated in their Board meetings and Nari was also on that Board. I knew that Nari and Sankar were friends and had known each other for 50 years.

But in the board meetings, Nari who chaired the audit committee would ask tough questions. He would challenge and sometimes question the position that Sankar took. Sankar was one of the best CEOs I have ever seen. He knew his business and how to run his company like nobody else could.

When I was asked to join their Board, I asked Sankar why he wanted a powerful board, being a private company. His reply was a lesson to me. He said that his position needed to be challenged and smart people on the board would be able to see if he missed a right turn or not. The second reason that he pointed out was that as he wanted to induct his son into the Board, he wanted to have wise people around. Stakeholder management is talked about widely today. Nari practised it from day one.

Don’t Forget Your Roots

In 2009, when Glaxo and Smithkline decided to merge, we had to take a lot of difficult decisions. We had inherited nine factories. We needed just two. We had to downsize our operations significantly and take out a large number of people. As many of them had spent their lifetime with us, the Board unanimously decided to compensate their release reasonably well. That had the full support of people like Nari.

Post the merger, Glaxo being the larger partner, we decided to break away from the past. We wanted to completely move away from our Worli office to a new location. Those of you who know Bombay will appreciate that the location of Glaxo factory is iconic. It’s called the Glaxo bus stop. It is a landmark in Bombay.

When we sought Nari’s advice, he said, “Why should you move your entire set up from Worli? You can keep your HQ there and relocate your manufacturing operations.” His point was deeply philosophical and his advice was not to forget the roots from where one came from. It was not a mathematical or economic argument. We should not forget the origins of our organisations. This is something that has since stayed with me.

Great leaders do not think that they alone are responsible to drive the company. They believe in collective intellect. They should also ensure that in their team, they have one or two people who have the courage to question their decisions and to push them back. A leader must not be surrounded by yes-men.

Mr V Balaraman, former President of MMA and former MD of Pond’s India Ltd who succeeded Mr Narayanan spoke about how Narayanan handled the challenge posed by the then Union Minister Mr George Fernandes and converted an adversity into an opportunity. The minister wanted each company to bring in high technology and provide great value addition to India. He wondered what contribution could come from a talcum manufacturing company. The government levied steep excise duty on talcum powder. Hindustan Levers chose to invest in fertilisers & chemicals to justify their continued existence in India while Narayanan chose the route of exports. While continuing with talcum powder, Narayanan allowed us to start manufacturing of shoes, leather garments, mushroom and thermometers and we exported them. The exports brought in substantial revenues to the company. For a period of ten years, the exports were far more profitable than the talcum powder marketing. Narayanan trusted people, gave them challenging assignments and gave them the freedom to fail and learn.