<div>Someone once spoofed: “A company is known by the man it keeps!” It is not the first time that an MNC has misjudged the Indian psyche of doing business on the ground, and certainly not the first time that leaders have misread what it takes to move from an established organisation to a startup. There are three critical success factors for startup organisations:<br /><br /><strong>1. Integrating leadership and business acumen:</strong> It is common for top person selections to be made on the basis of pedigree and technical competence. However, it is vital to also assess how easy or difficult it will be for the person to make the transition to a new environment, how well the person understands the new organisation’s ethos and business goals AND what are the person’s real leadership skills to deal with ambiguity. There appear to be many reasons for the initial failure. Andre didn’t understand that Kloop wanted breakeven in Year One and that there wasn’t much tolerance for a gestation period. It was clear that he did not know how a national distributor set-up would work and what it would take for him to collaborate and work seamlessly to achieve success. <br /><br /><strong>2. Integrating values and beliefs in the ways of working:</strong> There is a psychological framework called the ladder of inference, which impacts an individual’s ability to achieve goals and assimilate new learning. The ladder of inference outlines how emotional triggers affect how we interpret the situation, what assumptions we make and the beliefs we hold — all of which combine to move us to action. Clearly, a balanced and objective viewpoint would lead to a positive ladder of inference and actions that lead to desired outcomes. I wonder if Andre was stuck in a downward spiral personally in terms of his skills and capabilities to make the transition to a new organisation and establish credibility. This could, in turn, have led to a negative ladder of inference about the how the failure for the organisation was because of the selection of an unsophisticated national distributor. <br /><br /><strong>3. Proactively enabling integration: </strong>New entrants to the Indian market often underestimate the impact and role of culture, tradition and relationships in business success. It is not apparent to me that the top leadership team of Kloop were active in setting up expectations and creating an environment of collaboration between all the parties concerned. Notwithstanding the fact that Belani was appointed before Andre came on board, it seemed strange to me that the “mediator” in the case was a third-party consultant and not the senior leadership at Kloop. As the saying goes, there are two types of leaders — those that say “come on people” and those that say “go on people”. I saw a lot of the “go on people” at various levels across Kloop, which is perhaps why they got into the situation they did.<br /><br />It is quite unusual to see third-party consultants so closely committed to the success of the business. To this end, we need to appreciate the tenacity and perseverance that Raghuveer demonstrates. He comes through as really working towards the collaboration that is so necessary. His courage to deal with the situation in an objective manner really moves things ahead. Of course, the significant thing is what he says towards the end: “I wish I was not the one doing this to you guys!” I absolutely agree — this should have rightly come from Bawa or Haney. Ideally, they should have been there with Belani and Andre.<br /><br />I believe, we all understand that mutuality and collaboration are the pillars for achieving desired outcomes. Aligning on a common goal and purpose creates opportunities for exploring what will work and what adjustments need to be made along the way. Above all, collaboration will build on stakeholder strengths and thus contribute to a virtuous cycle of behaviours. <br /><br />Leadership at all levels must see it as their responsibility to nurture and set the framework for right behaviours. Organisation culture needs to enhance mutual respect and an environment to speak up and iron out the rough spots. We must collectively work towards making a positive, iterative cycle of Connecting-Exploring-Committing to ensure that strong relationships form the bedrock of collective success. <br /><br />(This story was published in BW | Businessworld Issue Dated 29-06-2015)</div>
