Well, the news is out with detailed reasons about why Cyrus Mistry was removed from being the Chairman of Tata Sons and Ratan Tata returned as interim Chairman.
Considering the unceremonious removal of the Chairman a setback for the much decorated business house, who is to be blamed?
Well, we shall see.
Most of the organisations have one or the other sort of succession planning in their scheme of things. And, critical of these plans were to select someone to lead the organisation. Well, most of those who lecture on management want everyone to believe Managers can be groomed into Leaders. Many a times experienced professionals fail to function as leaders. They might have reached the position by virtue of their qualifications, yet they fail. So, the problem is in defining the qualifications.
Many a management institutions declare they ‘create’ leaders. Forget black sheep like Arindham Choudhary, many legitimate institutions claim so. And not only parents, but even meritorious students believe these institutions can turn them into ‘Leaders’. It is a good business for the institution though. Well, they teach Students how to become a good leader by giving various examples of successful persons. If all those who read Lee Iococca’s biography or those books on Chicken soups could become successful businessmen, nothing like it. Unfortunately, it is not so.
Those who read history not necessarily make it. And those who make it usually are not scholars in history.
Consider the example of Nitish Kumar, who functioned as Railway Minister during NDA government. Everyone including those who teach in management schools know that it is easy to destroy but difficult to create or restore. Nitish Kumar functioned as Railway Minister in two stints. His first tenure was too short to comment upon, yet during this period he introduced internet booking and tatkal booking. During his second term, he tried to sustain the reforms and the Railways. It is not a miracle to convert losses into profits in three years. His actions started showing results, but by that time, his bete noir (now friend) Laloo Prasad Yadav took charge of the ministry. When the results of railways were good, the credit went to Laloo. In politics, it is common that the government of the day takes credit for what happened during their tenure.
But, how can IIM-A think it was Laloo Prasad’s initiatives that turned railways around? If one checks for ‘Kulhads’, one of his much touted scheme, are they visible now in any railway station? Well, students of IIM-A were ‘exposed’ to the ‘grand management guru’ that Laloo Prasad was. I never doubt his capacity as an astute politician, for there are only few who could match his vision and very few who are equal in his manipulating skills. Seriously, if the administration of IIM-A thinks Laloo Prasad was worth emulating, one can understand why those who graduated from there end up working for someone else, rather than being in-charge of their own companies.
If really one can be trained into becoming a Leader, by now Rahul Gandhi would have become a great one, with the budget and faculty that was at his disposal.
Even in business houses, all the leadership programmes fail often because they select wrong candidates. While selecting next generation leaders, each organisation lists out the qualities they seek in the candidates. But, choose only those who were the ‘Yes Men’ of the current management or in other words, a ‘Good Subordinate’. How can one good subordinate be trained to become a leader? If one trains a donkey hard, it may become a good donkey but will it ever becomes a horse, even a bad one?
Selecting leaders and selecting managers are two different things, for managing is simply surviving the situation. Leaders are needed to turn things around. To create new things. All leaders can be good managers, but it is not vice-versa.
What differentiates Leaders from Managers? It is their psyche. They empathize with people. They react to the discomforts of others. In other words, they fight for others. They value others like they value themselves. They don’t communicate with people, but connect with them. They empathise with people. And normally, people with these qualities don’t take orders, especially from those, whom they don’t consider equal or superior to them. They make bad subordinates and when not recognized by their ambiance, they become recluses. They simply wait for their turn, by being indifferent. They don’t pretend to be someone else, to reach the top. They are true to themselves first, before to anyone else.
While selecting his successor, Ratan Tata chose a person who was a good manager and had a relation to the group. But, what he should have been looking for in the successor? The job of Ratan Tata’s successor was not limited to run the business of the Tata Sons, but to continue the legacy of the group that had become synonymous with some ‘Values’.
Again, ‘Values’ is one of the word most abused by management pundits in the recent past. A person or an organisation doesn’t declare its ‘Values’ but practice them. If one recruits deer and expect them to function as Cheetah, will it ever happen?
May be the team that selected Cyrus Mistry started looking for some like JRD Tata. But, they ended up picking up…well…Cyrus Mistry, who was accused of deviating from the code of Tata group. The code that would want one to honour the word rather than increasing profits. The code that could bear the burden of temporary losses rather than losing the reputation. And, unfortunately, Cyrus could not fit the bill.
It is time for the reconstructed group to go back to their original check list before they modified it to suit to Cyrus. Only then they can select the true heir to the legacy the group has and can take the group to new heights. If they can pick up someone true to the Tata code, people would think the decisions by Cyrus were a temporary distortion in the group’s history. If not, well, Tata group will be just another business group. Despite the emergence of new billionaires, the charm of Tata didn’t vanish only because public doesn’t take it as just another company doing business to make money.
Though privately owned, Tata group is one of two groups, people in India consider their own, the other one being the Birla Group. Chairmen of these groups may enjoy the fruits, but only as temporary custodians of something that belongs to the nation. Ratan Tata and his colleagues in the selection panel shall keep this in mind while making their second choice of their chairman.