The Changing Leadership Expectations

Commemorating the 100th joint lecture series of MMA and Andhra Chamber of Commerce, Mr D Shivakumar, Group Executive President, Aditya Birla Group, gave a presentation on how leadership expectations are changing fast and how it is impacting our lives.

A staggering amount of change has taken place in the world. It’s only when you step back and look at it that you realise how much the world has changed. Let me take you through the last hundred years and how things have changed. Post-World War II, America became the dominant power; reconstruction of Japan started; The World Bank came into being; and Europe was being reorganized. Government played a key role in rebuilding the economy. One could not do anything in the world without the government. Leadership then revolved around military strategy and generals, and politics was about the ‘great man’ theory and a rules-based world order.

The 1950s were industrialists’ era. The model of leadership was around what the industrialists were doing. We learnt from them. In the 1960s, the world saw the hardware era. We had the supercomputer and IBM System/360 mainframe computers. In the 1970s, we saw the start of global branding. Nescafe and Coco-Cola were one of the first few brands to go global. The 1990s witnessed globalization, thanks to the rise of China as an absolute manufacturing powerhouse. We got cheap products, well below the inflation rates in most countries. The 2000s saw mobile phones coming through. I was involved with mobiles for close to a decade. In 2005-06, when I started in Nokia, there were just 90 million subscribers in India. When we said we’ll connect the 90 million to the 900 million who were not connected, everybody laughed at us. Today, all of us have mobile phones. The digital era started.

The current era, from 2020, is the platform era. It is about disruptive ideas. Each of these eras had a lesson for leadership. Till about five years ago, our leaders communicated their thoughts to the outside world through media and journalists—but not anymore. They now communicate through social media. There are 600,000 journalists in the world today, and 3.2 to 38 million influencers in the world. They trust influencers. Today’s leaders do not need journalists. They have their own vehicle.

Elon Musk is communicating his strategy for Twitter through tweets. The Wall Street Journal and economists are reading all his tweets, figuring out what he wants to say and do. Media has become more of a reflective commentary. All breaking news is on social media. That’s the first big and dramatic change for leaders. 

A birth and a death

In society, we see visible changes everywhere—with every new thing that arises, something else dies. Journalists are dying because of influencers. The mobile phone brought the death of the disposable camera. The leadership has to recognise that they have to kill or give away some of the skills they had in the past. Thirty years ago, dictation was a big skill for leaders; a leader dictated notes to the secretary. Today, nobody does that. Short-hand was a big skill for leaders’ assistants. Now short-hand is there but there are no assistants. Selfies are the death of autographs. I was in Australia for the T20 World Cup semi-finals and finals. Everywhere I went, nobody was taking an autograph. On the boundary line, people called the player and took selfies. That’s the new norm. OTT is the death of sleep, thanks to binge watching. We only thought of binge drinking and binge eating. People stack up for the weekend four or five web-series and watch them non-stop. Till you recognise that something of the past is dead, you will not change as a leader. 

Top 10 most valuable companies

Look at the most valuable Top 10 companies of 2012 and the most valuable Top 10 companies of 2022. How things have changed in 10 years! In 2012, Apple was the most valuable company in the world at $559 billion followed by Exxon at $409 billion, Petro China at $278 billion and Microsoft at $270 billion. In 10 years’ time, only three out of those ten companies are on the list. In 2022, Apple continues to be number one at $2.4 trillion. Its market value multiplied four times. Saudi Aramco is now at No 2 at $1.9 trillion followed by Microsoft at $1.8 trillion, Google $1.3 trillion and Amazon $1 trillion. Exxon Mobil is still on the list and its value has increased from $409 to $470 billion. Tech companies now dominate the list.

Top 10 most valuable brands

Let’s look at the most valuable Top 10 Brands of 2012 and 2022. Only six brands have lasted from year 2012 to 2022. In 2012, Coca-Cola was the number one brand with a brand value of $78 billion, followed by Apple, IBM, Google, Microsoft, GE, McDonalds, Intel, Samsung and Toyota. 

In 2022, Apple is the number one brand at $482 billion. Its market value has gone up by about six times. No 2 is Microsoft. Its value is $278 billion, up by about five times. No 3 is Amazon. It wasn’t on the list in 2012. No 4 is Google, up 3.5 times from $70 to $251. Samsung has gone up 2.5 times, from $33 to $87. Toyota has gone up from $30 to $59. Coca-Cola is still on the list but its market value has gone down from $78 to $57. Coke used to be the number one brand for 10 to 15 years. It has gone down because people now want to be healthy. Six of the Top 10 brands of 2022 are Tech brands. So whether it’s the most valuable company list or the most valuable brands list, it is technology which dominates and not traditional manufacturing industries.

Companies—then & now

What types of companies we had about sixty years ago? We had the military, government companies, private companies and family companies. Today, we have multinationals, family companies, private equities and venture capitalists (PEs/VCs), NGOs, Government companies, SPAC and startups. The leadership, which was confined to the military, government, family and private is now a much broader spread. Startup leadership is as much celebrated as MNC or private enterprise leadership. There are more avenues for leadership to grow and the dimensions of leadership in each of these areas are very different.

So, what are the changing leadership expectations and how does one look at it? Leadership development is a four billion dollar business. However, 50 to 60 percent of leaders don’t meet the targets in the first 18 months despite the industry doing well. The average tenure of a CEO is five years, and in India, it is four years. Gone are the days when you had a CEO with 15 years’ tenure. Recently, the government has announced that the tenure of the head of public sector banks has to be minimum 10 years. But overall, the CEO’s tenure is shrinking. It’s about maximising in the short term—trying to do everything right in 3 or 4 years’ time and getting out before anything goes wrong. 

Everybody talks about the VUCA world—volatile, uncertain, complex and ambiguous. My definition for VUCA for leadership is Versatility, Uncomfortable (Being uncomfortable in comfortable times), Collaboration and Agility.

The 10 changing leadership needs

#1: Leaders must lead and change, not react. In the past, you had reaction time. Today, it’s not there. They must be prescient to say what will happen in the future. They have to guess and put into play some mechanism, so they can win.

#2: A leader has to be a ‘knowledge sponge.’ A sponge keeps absorbing water. The amount of information out there is dramatic. You have to keep soaking in information. In the past, just knowing the industry information was good enough. Today, you need to know more than that because competition can come from anywhere. The competitor to a bank may not be another bank. It may be UPI. We now do banking through netbanking, ATMs or mobile banking. Today’s competitor will not be a competitor tomorrow. The whole motor industry was looking at each other—Volkswagen looking at Toyota, Toyota at General Motors and General Motors at Ford. But who came along and disrupted? Tesla. 

Look at the two wheeler market. Where are the EVs coming from? They are not coming from the current players but completely new guys like Ola and all kinds of new people. Once you gather the knowledge, you need to put out the insights for your people in the industry.

#3: Develop people, though you have a short-term. It is the qualitative thing. Develop them through meetings, coaching, the way you conduct yourself and the questions you ask than the answers, you provide. The best leaders ask a lot of questions. The ability to develop people is a very big expectation today. All young people who join an organization want to work for a boss for two years and learn as much as the boss knew from 20 years.

#4: Build relationships. The days of independent growth are over. You are dependent on somebody else. So, build relationships—with government, society, competitors, media and industry people—with everybody in the ecosystem. The industrial era was based on getting licenses. Once you got your license, you could build a relationship with anybody. That’s not true now. Today, you have to build relationships with everybody in your ecosystem.

#5: Be accountable. If anything goes wrong in your company, you have to stand up and say, ‘I am accountable.’ Look at all the layoffs happening in India. Every CEO says ‘I’m accountable,’ and ‘I’m sorry.’ But people ask, “What did you do about it? The leader must ask, “Why did I expand when I didn’t need to?”

#6: The leader must have high self-awareness. Unfortunately, when you are a leader, nobody tells you the truth. It’s only through multi-source feedback; by talking to 20 or 30 people; and by talking to competition, you can know the truth.

#7: Leaders must inspire. It may be through personal work, habits and behaviour. Inspiration does not come from lofty speeches. It must come from lofty ideals and walking the talk.

#8: Communicate using different platforms. Today’s leaders must remain on email, Twitter, LinkedIn—as many modes of communication as possible. They have to be 24 by 7 with the team. Whether people listen or not it is a different matter but that’s what they expect from their leaders. When you have a web call, half the guys don’t switch on their cameras. You hope that somebody is listening to you.

#9: There’s no place for complacency. You have to be accountable. You cannot postpone even for a minute something which you can do right now.

Most of these are soft skills. Leadership is no longer about hard skills, which are a given now. It is expected that leaders must know about strategy, Porter’s 5 Forces Model, etc. The hard part is the soft aspects of leadership, where most leaders get challenged and fail.

#10: Be REAL.

For leaders to be successful, they need to be REAL, which is my acronym for Relevance, Excellence, Authentic and Luck. Leaders have to be relevant. Remember the birth of something new is the death of something old. Social media is here to stay and leaders have to be on social media and relevant for today’s context. They have to excellent and cannot be substandard. Authentic does not mean being nice to people. It means being consistent and true to who you are. Being authentic means sticking to a few values and communicating them consistently all the time. You can only do that, if you put in the best work. You need a lot of luck to be a leader today. As the world shortens, you must have luck by your side. You might do all the right things and still fail. So you need that L called Luck.

Q&A

How can we handle success and failure?

The biggest problem for leaders today is success traps. They have been successful in the past with a particular formula and try to repeat it. The only industry it might work is in government controlled organisations. It may not work in a world which is disruptive. So watch out for success traps.

In organizations, it is tough to retain leaders beyond five years. So, don’t we need collaborative leadership?

Collaboration is just not for the rank-and-file. It must be across the line. There is no substitute to collaboration. You need to collaborate with people outside the organization. For example, I have good friends in many of my competitor firms. As an industry body, you have some common items to deal with like GST, etc. You must collaborate on a few things as leaders. You have to compete in the consumer’s mind. Between competitors, you don’t need to punch each other.

People say that luck favours those who help themselves. What do you say on that?

I agree to it. For leaders who consistently follow the process and prepare themselves for the future, luck comes knocking on their door. You need to be prepared for luck to favour you.

What kind of challenges will the leaders face now?

The biggest challenge for leaders will be the ‘time capsule’ condensation. More and more have to be done in lesser and lesser time. When I started my career as a CEO, I could take a week or two to gather all the information, assimilate it and come back with an answer. Today, the team comes to you, briefs on what is happening and needs an answer in the evening. Second, the amount of things you need to cram in your head which is 10 times more than what it was ten years ago. Third, you need to communicate very well. If you cannot communicate today as a leader, people write you off. It is sad but true. You must be a very good speaker and communicator. For example, Obama is a great speaker. When Obama’s speech writer went to the UK, a UK leader asked him to give suggestions on how to speak like Obama. You cannot be another Obama. You have to be articulate. You must be able to synthesize everything in your head and put it down in a simple manner for people to understand. Staying relevant is another big challenge.

How can one handle pressure as a MBA graduate or an upcoming entrepreneur?

Everything in life will have pressure, whether you’re doing MBA, BE or B.Tech or running a hundred core company or sourcing capital or technology. Sometimes it is self-induced and sometimes it’s not. If we are pessimists, we invite pressure ourselves. Some are optimists and don’t take pressure when they should actually be taking some pressure. Both ends of the spectrum are wrong. To handle pressure, first you must be healthy—by exercising, eating right and having right habits. When you are a leader, you must have energy and focus.

What are the personal habits that we have to change as leaders to have work-life balance?

Work-life integration is a deeply personal thing. It is entirely up to you. How you use the 24 hours a day is in your hand. If you spend 18 hours at work, then you have to recognize that the six hours you spend in the family is short. Sometimes you need to give your family more time; sometimes you need to give your work more time because both family and work will throw crises and challenges. No boss or company can give you work-life integration. It’s yours. If you don’t like the company and your boss, it’s better to leave it. That’s all.

Why do we see the great resignation today? In the pandemic, a lot of people sat at home and started introspecting, “What am I doing with my life?” There’s mass resignation and demand for work from home. As long as the individual is talented, he or she is the king. Talent is at a premium today. Going back to the REAL acronym, you need to be relevant and be the best in your job. Then if one door shuts, three days will open for you. Remember, the company is no longer accountable to you for anything. You are accountable to yourself and your family for everything that happens. It’s all on your plate. 

What is the strategy that Apple followed to stay on top?

Apple was very strong in desktop. Then they came with iPhone and iOS and built a beautiful world around it with all the apps. Over the last 20 years, they have been consistently innovative and looked at the product and service as an extension and not just as the product. That’s the biggest thing they have done right. They focused on design and user interface. The products are simple.

With things like moonlighting, frequent job-hopping and demand for WFH, what is expected of leaders?

I tell my teams, “Look, this is the company policy. I cannot change it.” As an example, if the policy says there’s no work from home, I have to stick to it. I always tell them, “Do what is right for the institution or the company. Then, you’ll always win. If you put yourself out of the institution, it’s unlikely that you’ll win in the long term.” I also tell them to work well with other people. Unfortunately, due to shortening life cycles, there’s a lot of jealousy and pettiness at work today. I tell all the teams, ‘Don’t indulge in that.”

You are the President of Mobile Marketing Association. Can you share the current status of 5G rollout and why there is a delay in it?

5G is here to stay. The 5G licenses have happened. One of the companies has committed 13 to 15 billion dollars of investment on 5G and the second company has committed four to five billion dollars. The latency and speed with 5G will be amazing. You can download a three-hour movie in under a minute. Metaverse will happen and everybody will go around with glasses and see the world in 3D. 5G’s impact will be dramatic. We went to one of the labs of Microsoft and could see a doctor in Bangalore operating on a patient and on his shoulder was sitting a doctor in Mysore on Metaverse, guiding him on the surgery. Assisted learning and assisted guidance will be one of the biggest things in metaverse. All of shopping which we do in two dimensional now will happen in 3D. You can wear the glasses, pick an apple in a store, check it and buy, all these sitting in your home. 5G’s impact will be phenomenal. Right now, I think, 70 countries in the world have 5G. To roll it out, it takes times as you need to build equipment and a whole ecosystem behind it. It doesn’t happen overnight. 

You spoke about lot of jealousy in workplace. Not much training seems to happen now in Organisational Behaviour. Should corporates focus on this area?

Now, on-the-job-training has died. Companies don’t want to invest in employees as they leave in two or three years. Second, bosses are very insecure and they fear their subordinates will overtake them. There are a number of reasons why this happens but as leaders, we have lost the ability to train people on the job. Each of us, as leaders, must do that.

Has spirituality got anything to do with success?

Yes. IKIGAI, the Japanese term is about purpose. One of the things is about spirituality. Many people say that spiritualism is the route to rid oneself of pressure. There are many different thought processes, but I think ultimately, it’s down to the individual. You must be comfortable at what you’re doing. There are some people who are hyper and successful, who don’t take pressure. There are people who are very calm and serene but don’t deliver. There is no one formula for any one individual, but I see the growth of yoga, ayurveda, organic and naturals. I can see that people are trying to reach out and touch the roots from where they came. So spiritualism is a big movement. Whether it is the answer, I don’t know. But definitely, it’s on the rise. 

What is your advice on the habit of reading?

It depends on your learning style. Some people read books and learn. Some people learn by working in project groups. Some try experiments, fail or succeed and learn. You have to figure out what’s the best learning style that you are comfortable with. Then stay with it. For me, it is learning from a book reading. I read many articles, look at the information and see if a trend exists. That has worked for me all my life and that’s why I tend to read a lot.