Case Analysis: Focus & Culture

Leadership’s focus on shareholder returns, exclusively, paradoxically, often produces the opposite result. Financial results are the consequence of doing other things right — not the primary focus area. The need is for a strong culture with empowered employees who are engaged and challenged. This will lead to positive customer experiences and high performing teams and, consequently, good returns to shareholders.

Ananya buys a competitor’s oil as she does not trust Kayplas. I believe that employees must be strongly committed to their employer and employer brands. If trust in the employer has been lost to the extent of not trusting its products, then Ananya should resign. Clearly she has reached such a stage of disengagement with Kayplas.

Kayplas is wrong to protect JD and just transfer him. Any wrongdoing, especially in “zero tolerance” areas like sexual harassment, must be severely punished. JD’s employment should be terminated and the reasons must be shared with all employees. Such examples are critical to set expectations and create the right culture, just as ‘no punishment’ helps build a culture of condoning wrongdoing at all levels, while demotivating young, idealistic employees. Ananya’s extreme reaction to JD not being punished comes from her very volatile personality. Shyamak should counsel her to enable Kayplas redeem itself, by making an official complaint through HR and, in addition, ask for an interview with the CEO. The messages she has received from Freida Mistry are unofficial; it is possible that it was not formally discussed with the whole leadership team including HR and the CEO. If still nothing changes she would have to resign.

What are the broader lessons from this and the recent United Airlines case?

Top leaders often do not understand the importance of building a strong culture. They think it entails writing a values statement and having HR run a few workshops. Culture gets built decision by decision and action by action that leaders take, rather like a cathedral is built brick by brick. Each decision and action must be consistent with the culture desired. While cultures take years to build, they can be destroyed by a few out of sync decisions/actions . Employees follow the leader’s actions, not a pithy statement on the wall.

Thus, culture comes from employees. They need to be engaged, challenged and have fun at work. They need to feel a sense of belonging. Everyone should feel free to raise objections and contribute their opinions. A combination of these will result in a high performing team that enjoys working and hence tries 120 per cent.

They will set themselves stretch targets and achieve them.

Financial results and shareholder returns are a result of delighted customers who patronise the company and pay top dollar for the privilege. This is based on consistently excellent experiences at every touch point. This means every interaction with the organisation and its employees must deliver more than expected; each of its products, or experiences of its service, must delight. All of this can only happen if employees are happy, engaged and “own” the organisation. More so for service organisations, as the “product” is what the employee at the coalface makes it. Hence, leaders focused on achieving shareholder returns without thinking about customers and employees are trying to wag the dog by the tail and are destined to fail in achieving the shareholder returns they so crave!

If United Airlines leaders had been focusing on such a culture the recent fracas could not have occurred nor would the CEO’s initial public statements have been so clearly incorrectly positioned. Similarly at Kayplas — where a senior Mistry (‘I retire this month-end, mercifully’) and a far younger Ananya, are disenchanted — disaster is likely.

Leaders need to focus on getting employees aligned and involved, along with building the right culture. This will result in high performance, will ensure customer delight and result in profitable growth and shareholder returns.