MMA-KAS in partnership with Raintree Media and Harper Collins organised an event on the theme of the book, “Busted: Debunking Management Myths With Logic, Experience and Curiosity.” Sandhya Medonica, co-author of the book anchored the discussions. Others who took part in the discussions were Mr Ashok Soota, Executive Chairman, Happiest Minds Technologies Ltd and Mr Peter De Jager –both co-authors of the book; Mr P Ravichandran, President, Danfoss Industries; and Ms Meera Nair, Independent Director, DBS Bank India Ltd.
Mr. Ashok Soota: We come across multiple myths in our communication, like culture eats strategy for breakfast; fail fast, fail cheap and so on. These are like truisms and aphorisms, which cause me a lot of irritation or annoyance. If taken at face value, it could lead into erroneous management decision making.
One of the myths is of saying that a company is over led and under managed. The other one is that we are over managed and under led. How do myths like these come around? The so called management gurus and writers who keep writing on topics like these created them. Leaders must create a vision and show people the path ahead. So many organizations go down the drain, because they do not have good management. To me, both leadership and management are two sides of a coin. You can’t do one without the other. You must be a good leader and a good manager. You must have an alignment with the vision. You have to be very clear about your processes and the rhythms of your business and look at you can manage them well. You must strive at all times to be a good human being.
Ms. Sandhya: Fail fast, fail cheap. What is your opinion on that?
Mr. Ashok Soota: It originated in Silicon Valley. There, money is easy to come by. There’s also an approach of saying, ‘If we start something, let’s not blow up too much money. If required, we need to move away from it without blowing up a lot. Therefore, we will take this thing of failing fast and falling cheap.’ To me, that’s absurd, I don’t think you should ever start a company thinking that is going to fail. You have to start a company with the intent that it will become profitable.
You will ultimately be able to give an exit to your stakeholders. Now, in order to do that, there is only one prerequisite. Apart from having a strategy which keeps evolving, you need to be clear about how much cash you’re going to need, till you break even. One very good example is the dotcom boom. In India alone, out of 100 companies, 98 or 99 went bust. At Mindtree, we not just survived. We re-strategized and went on to do a record breaking IPO. The key to all this is that we had enough cash.
Ms. Sandhya: There is a myth that PowerPoint type presentations are the most boring thing. Can you explain?
Mr De Jager: Most of the PowerPoint presentations take the same form. There’ll be a white background and there’ll be several lines of text. The presenter will start presenting in a monotone for four hours and they will bore you to tears. But that’s just a bad use of a wonderful tool. We communicate with images, right from 50,000 years ago. A picture is worth 1000 words. If you create a PowerPoint with images to communicate your ideas, then you can say a tremendous amount in a very short period of time. You can focus your attention on communicating the content, rather than reading off the screen. I consider PowerPoint to be the best way to communicate complicated ideas.
Ms. Sandhya: What about ‘being lonely at the top?’
Mr Soota: I’ve now been a CEO of a company for more than 40 years. I can’t say I’ve never felt lonely. So that’s one starting point. I put this into two groups. One, the buck stops with the CEO, and therefore you feel you’re isolated. You have to take the flak when things go wrong. You also get a lot of credit, when you take those decisions. Secondly, if you do your decision making in a participated way, it doesn’t matter if you take the flak when things go wrong. The whole organization thought that it was a good decision but it didn’t work out. You will be comfortable in that process and will never feel lonely at the top.
The other aspect is the distance between the leader or the CEO and the rest of the organization. If you’re living in an ivory tower, you would certainly feel lonely. If you think of your team as your extended family, involve them, genuinely care for them and you’re building their careers, what you will get in return is tons of goodwill. You get the love and affection. So it’s an opportunity to give and it’s an opportunity to get back. I keep meeting people who’ve been working with me as a part of my team over the last 40 years. They come back and tell me, “We remember this particular thing, which we learnt from you or which we participated with you and made it happen.” So I can’t think of being lonely at the top.
Ms. Sandhya: Peter, A very controversial myth that you busted which Jack Welch made famous is, fire the bottom 10%. What is your view?
Mr. De Jager: Jack Welch is a very famous business person. He has proven that he absolutely knows what he’s talking about. In one of his books, he points out that a certain portion of your employees will be your top performers, the ones who go above and beyond the call of duty. He’s put a number on it around 20%. He then says that about 70% of your organization will be the ones who are delivering to your requirements. They’re doing the job day in and day out. They’re reliable, they’re your core and then he said there will be somewhere around 10% of the organization who are underperformers.
Now he could have said, fire the under performers, but that doesn’t have punch and hype to it. So he made it simple. He said fire the bottom 10%. Some organizations unfortunately, took that literally and asked their managers to fire the bottom 10% of the department, every year, no matter how good they are. That is catastrophically insane. If you fire good people, just because they’re hitting this magical number, then you’re creating a hostile environment for your people. People are not numbers; you need to treat people like people.
Ms Meera Nair: George Bernard Shaw comes to my mind. He had said, a golden rule is not a golden rule. Such contradictions exist in different aspects of our life. For instance, in every truth, the opposite is also true. Ignorance is bliss versus Knowledge is power. There is no such thing as free lunch which contradicts that the best things in life are free. We need to acknowledge and explore about these contradictions, and use them in the right context.
Myths are narratives, which are stubborn and which are memorable. They leave an ever lasting impact. I will take one myth from my experience, which is- culture eats strategy for breakfast. I was a part of the founding team of National Commodities and Derivatives Exchange in 2003. Till 2003, the commodity trading industry in India was largely unorganized. There were few dominant players and it was not transparent. The objective of creating the exchange was to offer transparent trading mechanisms for price risk management of agricultural and other commodities.
Given this industry context, the management felt that they should create a culture which was open and transparent. Importance was given primarily to integrity, open communication, and education of not only the employees, but also the customers. For any organization to be successful, both culture and strategy are equally important.
Mr. Ravichandran: I come from a manufacturing sector. There’s been a lot of talk about ‘fail fast, fail cheap.’ Around 1999, we acquired a startup company, which was headquartered in Melbourne and relocated to Toronto. This company had oil free technology. In the air conditioning business, ‘oil-free’ was something unheard of, because oil is one of the lubricating forces in a chiller. We believed that this was going to be the future of compressor technology. We picked up the startup on a 50:50 joint venture basis.
The product took 10 years to get out to the market. We had enough cash in the reserves to fuel the business and our founder believed in the technology. Today, the world is talking about ESG and this product is 99% circular and 99% of the parts are recyclable. If we simply went by the myth of fail fast, fail cheap, today we wouldn’t be leading the market with this technology.
‘Culture eats strategy for breakfast,’ largely comes from Ford Motors. Culture is the DNA of the company. We don’t make too many changes to the culture, but we make some adaptations based on how the environment changes. Strategy is very different and it is how you adapt to the external world. You need both to be combined if you want to execute perfectly. In my organization, even after 90 years, the values the founder had established stay relevant. We have three behaviours as our guidelines and they are: Do what matters most for your customers;. Every employee should run the business like their own; Think about the company first before you think about the business and yourself.
Ms. Sandhya: Which of the myths you busted present the most pressing challenge for industry practitioners today?
Mr. De Jager: My background is change management. The biggest challenge we’re facing is the belief that people resist change. No, they don’t. They resist being changed. You can get your people to desire a change and there are techniques for doing that. You cannot hold them back. If you believe that people will always resist change, you will not be able to move them forward.
Mr. Ashok Soota: Michel Porter says that the essence of strategy is choosing what not to do. His reasoning is that there has to be a trade off and that you can’t do everything. I don’t agree with this at all. Like a venture capitalist, I will say that if you have a good idea, then you have to find a means of funding it. Secondly, you don’t necessarily have to face trade-offs. The errors of omission may be much larger and much more expensive than the errors of commission. You may not even know what you have lost. When Bill Gates was asked, “What is the biggest mistake you made in your life?” he said, “I didn’t do Android.” He was the guy who owned the operating system work. He realized years later that he missed that opportunity.
Now, we’re in an intensely hyper competitive world. Everybody’s got to have a stake in everybody else’s place. Otherwise, you don’t know when they will come and wipe you out. For many years, Google completely dominated search, yet Microsoft never let go. They were hanging on. Suddenly a new change of technology, the Generative AI, has made them another major player in the space. So you’ve got to keep your options open. The third angle, which is relevant today, is that we’re developing our businesses which run off platforms. The platform brings the buyer and the seller together. In that context, you can do much more than you could have thought of doing in the past. So Porter’s statement does not stand the test of time.
Ms. Sandhya: Meera, you’re a board member and a management consultant. What are the red flags for Indian companies while scaling up?
Ms. Meera: In my view, the founding team is the biggest asset for a startup and it can also be the biggest liability. They must have vision, passion, the mindset, and the capability. Second is the financial sustainability of the startup and the funding capabilities of the organization. Third is talent retention and talent availability.
Mr. De Jager: The founders have a particular mindset about delivering something new to the market. Yet, they may not have the ability to run a large company. They’re the creative force, the early adopters, the innovators, but they’re not the ones who can manage the growth of a company. Those are different skill sets. To expect the original founder, to be able to take it all through the entire cycle, is asking for too much.
Ms. Sandhya: Do you reexamine your beliefs and assumptions? Does it cause you to change any of your beliefs?
Mr. Ravichandran: Yes. For example, they say that people leave because of their bosses. That’s not true. People leave for several other reasons.
Ms. Sandhya: What is management in a nutshell?
Mr. De Jager: Managers maintain the status quo and leaders change the status quo.
Ms. Sandhya: Tell us about a myth that annoys you the most?
Mr. Ashok Soota: This is about ‘hiring people smarter than you.’ It’s too simplistic and doesn’t take into account things like multiple intelligences.
Ms. Sandhya: What is the difference between leadership and management?
Mr. Ravichandran: Leadership is setting the direction for the company, making people believe in the purpose of the company and to really articulate that to the organisation. Managing is empowering people, providing them with enough resources and the opportunity to realise their full potential. Whether you want to be a good leader or manager, you need curiosity, empathy and humility.
Ms. Sandhya: Tell us about a common management myth that you come across.
Ms. Meera: ‘People leave people but not organizations.’ I was the executive coach of a senior woman leader. She was reporting to the CEO. Three years after her joining, a new CEO took over. He was autocratic. He would humiliate her, be judgmental, be critical and would make fun of her in public. She was quite annoyed by the whole situation and wanted to leave the organization. Later, she discovered that though she was very well qualified and experienced, she was taken at a lower pay scale as compared to her peers. She was also denied a promotion. The company bragged about diversity, inclusion and equality but in reality, they were not practicing it. Now the question is: Who is to be blamed-The leadership or the company’s culture?
Ms. Sandhya: Would you like to comment on any other myth?
Mr. Ashok Soota: Let me take this one: ‘If it ain’t broke, don’t fix it.’ The world is changing so rapidly and if you wait for things to go wrong, before you begin to fix things, then you’re going to be well swept out of business very soon. You have to be proactive. You have to go and break it, if required. Question the status quo.
Q: How can we develop a culture of questioning established practices within the organization?
Mr. Ashok Soota: There has to be an open environment, which encourages such questions. Certainly, there has to be no fear. In all the companies that I have run, we have regular communication sessions. We keep emphasizing to everybody, that there are no holds barred, they can ask any question they want and we will answer it. You must establish that rhythm and belief and everybody must realise that if they ask a difficult question, they are not going to get punished, but maybe rewarded for it.
Mr. Ravichandran: The leadership must make sure to build an organization where there’s a lot of psychological safety for speaking up.
Q: Management practices can vary significantly across industries and cultures. How do you account for this diversity, while offering universal principles for debunking management myths?
Mr. De Jager: Companies are different. We often hear about best practices. But the fact is that there is no single best practice that every organisation can use. Every snowflake is different as is every best practice.
Q: How can we balance the wisdom gained from experience and the need for innovation and adaptability in management?
Ms. Meera: Constantly update your knowledge, your skill set and understanding of what is happening out there, so you don’t feel that you’re old and experienced. While experience is the best teacher, keep an open mind and a desire to learn.
Mr. De Jager: One of the most underutilised resources is the business associations that exist in the world. If you want to know what is happening in your industry, join an industry association. Volunteer and become an integral part of it. You will meet people, network and gain from the experience of others – both successes and failures. It is cheap and powerful. My career started by being part of associations.
Q: What is your view on the saying, ‘Disrupt before you get disrupted?’
Mr. Ashok Soota: Today, change is coming from so many new technologies. New business models are evolving. The internet is creating new business models. If you don’t start disrupting, for sure, you’re going to get disrupted.