This case highlights three issues: the impact of a bad team player in an organisation, the transition to a managerial role and the personal conflict managers go through when they have to deal with ‘bad news'.The best teams are built on the collective strengths of their members. When this is not the case, cohesion is lost, and organisation performance falls below expectation. A good team provides the backdrop for individuals to enjoy most of their waking hours, some redundancy to tide over personal issues (as most of us face at some time or other) and give meaning to their work lives. Synergy in teams helps them achieve more than each can by himself or herself. In a team where one person pulls in his own direction, there is seldom joy or energy. In time, the team will fall apart and hurt the entire group. It is in the best interest of the organisation that such situations be dealt with at the earliest: rectify behaviour of the person, move him into a role that allows working by himself or ease him out.Managers who are promoted from a technical role often want to stay in touch with their subject. They see this as important, as team members seem to respect or relate better with managers who understand their work deeply and can guide them. Managers often translate this expectation into being personally involved in technical work; they are not confident of delegating or sharing their workload, especially when up against tough deadlines. In addition, many managers feel pressured to keep their skills up-to-date, so that at a pinch, they would not be considered ‘irrelevant'. So, they often do technical tasks that would be better executed by junior team members with fresh skills, methods and ideas. For a team, a manager is really an enabler. Perhaps with Jimmy, there is a gap between what he is used to doing and what is expected of him.Manika very nicely describes the need to have young and old employees working hand-in-hand. Today's youth come from a different paradigm. This is reflected in Nomita's approach to baking. Bosses need to be able to relate with this generation and provide them an environment in which this different way of thinking can be applied seamlessly. While hiring a manager, the organisation must clearly define expectations of the manager, so that the interviewers are able to judge candidates on this basis. Some of Jimmy's background seems to indicate that perhaps he was not such a great team player earlier either. Is not being a team player pathological?Jimmy cannot be called a leader. Leaders provide vision and aspiration to their team. People who need reassurance about their own capabilities typically would not be able to think strategically. When Jimmy was brought into Alsora, it was at the instance of an ex-colleague, who obviously knew his strengths and style. Was it that Jimmy's heart was not entirely in his new job? Was it that he was too tired, having come out of "retirement"? Was it that he did not see an opportunity for himself, as he would have, say five or 10 years earlier? Was this cultural misalignment? Or was it that he was unable to understand the new expectations? This case also highlights a gap in the way new managers are mentored. They are often left alone to manage their transition into their new role.Having decided that Jimmy doesn't fit, what should Manika do: ask him to move on, or help him correct his behaviour? Did Jimmy have feedback? Did he realise that he was disrupting his team? Was he given a chance to change? Arguably, culture fit, especially in senior roles, carries higher weight than technical capability. All organisations have individuals who are technically sound. The big issue is, how to create an environment where they can contribute or are forced to do so, not for themselves alone, but for the team as a whole. It is here that the role of the manager or leader becomes so precious.Shankar's experience of letting go one of his team members is by no means a unique one. There are several reasons why managers hesitate to let go a team member who they believe is ‘technically good, but zero as a team player' — very specialised skills, the lack of headcount budget, tight deadlines or even "someone is better than no one".Shankar's insinuation that Jimmy's behaviour issues are gender related does not really hold water in this case. It is indeed unfortunate that even today, many senior people feel obliged to blame the ‘lady boss‘ in the first instance.Easing a person out of a job at Jimmy's age (or any) can cause mental agony to managers. It is not easy to distance oneself from people as individuals. While the case of Temple demonstrates the struggle that leaders go through when it comes to issues with people, by no means are ‘hard decisions' about people decisions alone. The culture shapes the manner in which an organisation would deal with all kinds of tough decisions and so merits special focus at the senior-most level.Susheela Venkataraman is managing director of internet business solutions group, Cisco. Her consulting experience has focused on enterprise and community transformation(This story was published in Businessworld Issue Dated 13-06-2011)
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A US based internet radio site comes to mind. When they air some lesser known singers/musicians a blurb comes up asking you to "make 'em" or "break 'em". If you don't make the grade you're out. Either you fit in or you don't. Perhaps a very functional approach to things but one which does not take into account the more humane side. There are many such organisations that can be quite cut and dried about shaping up or shipping out. Which is not to suggest that it's either being cold about it or excessively tolerant. Let us dig a little deeper...While there are several skills or competencies that are necessary for 'doing justice' to a role and indeed one's evolution as a professional, there are some 'career stallers' or 'derailers' that pose a potential threat. These are behaviors that can undermine and lay low a perfectly promising career. Some of these derailers include workplace arrogance and bruising others through the viciousness of what one says or the inability to adapt to changing circumstances or to learn or issues around the lack of integrity or failure to build teams or overmanaging/ micromanaging and so on (one can get a whole list of these derailers in the book FYI: For Your Improvement, A Development and Coaching Guide by Lombardo and Eichinger, published by Lominger Limited). Sometimes the most promising careers can get completely destroyed. Often one sees that a certain aggressiveness actually works in getting things done. Over time such people get promoted and rewarded and that seems to validate their behavior. However, they reach a point when suddenly the same aggression begins to raise eyebrows and people start doubting what given further promotions will do for both the person and those in the 'firing line'Awareness of these derailers is far from automatic. One is often confronted by one's own 'blind spot' that prevents a clear line of sight to the problem areas. The more senior one gets the less constructive feedback is given. Often, in hierarchical organisations, the 'juniors' or subordinates find it nearly impossible to give potentially self correcting feedback for fear of antagonizing the boss. Consequently, the boss can get away with a whole lot and the burden really falls on those who work with such a person. Capability associated with delivering numbers is one thing but how the process was achieved and how many people were bruised along the way is quite another.The recognition of these career stallers or derailers is a necessary first step to appropriately dealing with them. If we believe that such blind spots are 'deal-able' with, then we are in a position to look for ways and means of building awareness as a starting point. Which is not to say that they are always 100 per cent rectifiable but there can be an attempt to redress the issues and speak about them openly in the spirit of learning and growth.The reason Manika is assailed with doubt about her decision is that there is no framework to help her (or others) think through these issues. Clearly Jimmy is very competent in some ways "...a very sound technical man.... he could see a product... simply 'see' it and tell you what was wrong inside." He has very special and unique skills. The downside with Jimmy was that there were pockets of behaviours which put off some team mates ....they all felt a certain displeasure working with him, the sort you cannot easily define, yet you know it is derailing your speed. The issue came down to 'retain vs sack' without any intervening 'working through' process, which could potentially allow a second look into the issues and make it at least possible for change. Of course, if the change is not forthcoming, the derailing behavior wins the day and there may be no other option but terminate.Jimmy also comes across as a strong 'individual contributor', a specialist. Perhaps he is not such a good 'manager'. Often in organisations, promotions happen because of expertise without the person's understanding how the role changes when one has to 'manage' other individual contributors. Either one can create a space to learn the critical skills or else opt for retaining one's position as a individual contributor. Naturally a clear and frank discussion would be a must if it is not to be misunderstood as a demotion. Not everyone may be suited to taking managerial responsibility. This is perhaps what Kannan was saying when he questioned Manika's decision.Having a doubt about a decision only means it needs to come back onto the 'drawing board'. Where Manika seems to get stuck is between her appraisal of Jimmy and whether it warranted a sacking. Perhaps the missing intervening variable is exploring alternate options prior to the sacking so that one is trying to make the best of a hard situation. Fairness, to my mind would be far better than a cold decision to terminate. That would involve either a coaching process based on data gathered (such as 360 feedback, self report and the like) or even a re-deployment based on skills Jimmy has demonstrated. It is the absence of this intervening process that makes the decision somewhat haunting for Manika. She may be inclined to terminate him but perhaps after some exploration of alternatives it can become easier and 'more fair' both in one's own as well as others' eyes.However, what if Manika has a 'natural' difficulty in having a face-to-face conversation with Jimmy? This does seems to be avoided in the case, leading to a quick decision to terminate outside of a talk. Perhaps there are some conditions that govern more direct communication. For instance, between a parent and a child or an older, 'more experienced' boss and a less experienced direct report the talk can be more straightforward and easier to do. But what happens when there is a reverse situation: an older, more experienced report and a younger manager or from a daughter to a father? Perhaps we are treading on one of our several 'cultural edges'. These edges are ones that mask subtle hierarchies around gender, class, caste or age. Typically they are skirted making for a broken conversation and several things unstated. We may need to 'go against the grain' of our culture in these matters and prepare ourselves for these difficult conversations.Kaushik is an organization consultant, leadership coach and facilitator. He has a background in psychoanalysis and the behavioral sciences. He is an Associate Coach and Faculty with the Center for Creative Leadership and he works with Chatur Knowledge Networking Pvt Ltd.Kaushik Gopal is an organisation consultant and leadership coach. He is an associate coach and faculty with the Center for Creative Leadership and works with Chatur Knowledge Networking(This story was published in Businessworld Issue Dated 13-06-2011)
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Manika Singh stared at the rush of life outside her Honda City, feeling numb and dull. The events of the day before bothered her. Yet the same event wore new clothes and came back at night and stood before her commanding her to examine her heart and give it a proper name.Manika was the newly appointed business head for Temple India's office products division (OPD), Temple's most high-profile business, most profitable yet most volatile. After the previous head, Chip Kalra, quit eight months ago, Temple had been hesitating to appoint his successor. The parent company in the US had been toying with the idea of an expat in that chair, but had finally persisted with Manika. One of the major responsibilities placed upon her was merging OPD's Alsora technologies, a not-very-vibrant unit, with OPD's technical division. Manika worked closely with Alsora. Her assessment was: Alsora had great equity in the form of loyal teams, strong asset backing, potential... but a terrible head, Jamshed (Jimmy) Sangma. As COO, Manika worked with four different teams, including sales, finance/costing, logistics and operations. Jimmy, by virtue of his role as chief technical head, had been germane to many of these teams as their ‘supplier', and in every interaction involving optimisation, Jimmy had been the parantu (‘but then') factor.Jimmy was a sound technical man. He could see a product — simply ‘see' it — and tell you what was wrong with it. He had worked in three large MNCs before coming to Alsora, where he had been heading technology for six years.To understand a little of Jimmy Sangma. In the companies he had worked prior to Alsora, he had been seen as a sound tech man. The one job that had shone like a diamond in his favour was as factory chief for Delaware India, a large FMCG MNC, where Jimmy had been a steady resource, earning a great name for himself as a dependable technology man.This itself came as late as 2000 when post-liberalisation, Delaware had invested in computerised production and Jimmy had been sent to the US to learn the ropes. Then came a slew of new entrants to India and Jimmy bandied his ‘foreign education' and swung himself an excellent offer at a cola company, quit that for a bit more at Kansa, an IT company, where some strategic moves left him in an undesignated job, which Jimmy resented. So they gave him a golden handshake only to keep things quiet.Jimmy was 54 then. He decided to go home to Assam, when suddenly, an ex-colleague from Delaware offered him a job in Alsora, as head of its technology division. Jimmy was not sure if he wanted to get back to full-time working. But the offer was good, so he agreed. It would help him put three more nephews through post-grad education back home.Jimmy was aware that he was technically good. But there were pockets of behaviours that put off some team mates. No one ever said it overtly, but they all felt a certain displeasure working with him, the sort you cannot easily define yet you know it is derailing your speed. For example, Manika recalled the time Jimmy had been sent the tech specs for a new project. Bansi Jacob, one of Jimmy's close assistants, had asked to see it and Jimmy had said he was working on it and could not pass it on. Whereas truth was that Jimmy was not working with it then. On another occasion, when Nomita Vaidee, another MT had come up with a suggestion to rework a persistently failing module, based on some model she and others in the team knew about, Jimmy had turned cold and distant and said, "You guys just go and learn all these smart models and formula and think it is magic and can turn in success! Success is not instant noodles! One has to work on it."Manika recalled talking to Nomita over lunch. The youngster said, "If you ask me to bake a cake for my son's birthday, I would buy a Betty Crocker and bung it all together. My mom? She begins with going out to buy fresh flour... and slaves over every little detail. Jimmy feels that a thing is good if we do it the way it was done in the 20th century. I don't think so. Well," she sighed, "I guess we have to deal with that..."Another aspect of Jimmy's that stood out was that he had retired from an active career and then made a come-back. Jimmy was, what they called, a second innings manager. No, Jimmy was nowhere near retirement, yet, at Alsor, he seemed to live in the past. As Manika said to G. Kannan, her colleague, "Does he really need this job, is not a fair question. But if he really needed this job, he would get on to the learning curve. He develops the attitude of a boss... likes to be one… which really means he wants to be in correction mode, reprimanding mode, being-critical mode. But if he was a real ‘boss', he would appreciate a good suggestion, that is what I feel." Manika was 39 and dealt with young fresh MBAs all the time. So many of these kids, who are 4-5 years out of B-school, knew so much. Even I realise they know so much, because what they say to me is fresh and charming and new. So I work with them, extracting some good, applying it, testing it, using their strengths, plus giving them the experience that made me strong. break-page-breakKannan said, "These young people are closer to the age of his children probably, hence he shifts to dad-mode where you typically argue, challenge, question and sometimes rubbish your child!"Yet her own boss, Shankar Kashyap, was also another reengineered post-liberalisation, post-VRS manager. But he was so different: empowering, delegating, engaging, challenging, enabling. Even when he rejected her ideas, he had good reason to do so. But then Shankar had been a success in his last organisation. Did that make the difference then? Jimmy had never reached a height in any of his previous organisations and had been given the golden handshake because the merged company had no use for him. Are these where the real DNA of behaviour lie?Manika often had to grapple with strange behaviour among some of the team players. For instance, his ‘devotees' seemed to have formed a coterie around Jimmy, calling him ‘boss'. At Temple, such language jarred. Vinay Kaushal, one of the senior officers, had once casually remarked: "It seems to work for those who treat him like that!" But all that was leading to some unhealthy patterns, she felt. The more junior ones carried tales to him, complained about silly little things, conjectured and drivelled... there was no need for that. But worse, this was creating a fissure, a wall of ‘them and us'. Last month, just as Manika was preparing to take over OPD as COO, the merger of Alsor was placed as priority before her. Temple's HR had then asked her to look closely at the headcounts and let them know if any of them could be easily retired. And soon after her assessment of Alsor, they asked her what she thought of Jimmy. Manika had opened her mouth to speak when Karl Kapadia said, "We are considering retiring him..." and she had said, "Yes, he needs to be replaced." They then exchanged some notes on the overall management of the retirees, the ones being retained, how the remuneration should now be fixed... and there it ended.That evening, Manika met Kannan in the board room for a presentation on the revised organisation structure. He took her aside and said, "I understand Jimmy is going... I mean no doubt he is ‘difficult', but surely that is not your reason? I think he is a good guy! Unless you take your assessment of second innings people seriously?"Manika: I do, actually. I do have a viewpoint on what a second innings chap can potentially do to a culture. But that is not my reason to ask Jimmy to be retired. Jimmy is a dreadful team player. He is unwilling to allow new ideas. He needs reassurance that he is good, it would seem, if you observe the coteries around him!Kannan: Arindam Sharma (ex-MD) was like that... he did quite well for himself. It is social behaviour...Manika: No! It is organisational behaviour. You may have a psychological need for adulation, but if that leads to sub-optimal organisational performance, that is incorrect.Kannan: So was Arindam Sharma suboptimising organisational performance?Manika: I didn't say that. Besides he was a powerful thinker, a brilliant strategist... the coterie was more communal. He liked to see his natives near him... and you are comparing Arindam Sharma with Jimmy?Kannan: Jimmy is a good guy. He is not dandy, or extrovert, but inside lurks a solid tech guy... that is why he was hired here. But you seem to have already labelled him second innings.Manika: The organisation is at a stage where it has terrific young people, with great knowledge, great ideas but lacking mental discipline, lacking work ethics, sometimes even manners. The reason organisations hire the second innings guys is because today companies are growing faster than they can, taking decisions more hastily than is good, hiring people sooner than they can ably shoulder senior jobs. The market is crazier than it was, the profits tucked in are fabulously deceptive and the young are facing all this too early, and importantly, without the right tempering. The second innings manager is a great asset to organisations on the rise. They carry with them, like Jimmy does, great intelligence and knowledge. They want these Jimmys to come and set the pace, inject discipline and order, but gently. They want them to sift the slew of decisions and moderate it... temper it.But if the second innings manager is already arriving with baggage, who is he helping?Kannan: Think about it. I think you may be hasty. After all, you are the one working closely with him, you should know...Exactly, thought Manika, then why are you standing in judgement?That night her family had gathered a few friends for dinner to celebrate her new position at work. While everyone was all laughter and smart clothes and excited (as if they had won the promotion), Manika felt confused.Have I done wrong? began her mind...That was the dark moment for her. Standing behind the huge bamboo tree on her veranda, Manika held her arms tight around herself and chewed her lip. The rest of the evening was a blur. By 9.45 pm, Manika had had enough and prayed that the friends and family would leave without demanding too much ho ho ho.Next morning, she called Shankar Kashyap. "I am assailed by a thought," she said. "Can someone take an independent decision on Jimmy Sangma and disregard mine?'Shankar was hugely confused. "What is all this? Where is it coming from?" Manika: From diffidence. From the fear of causing damage.Shankar: And you think you may have done wrong in agreeing to Jimmy's termination?Manika: Shankar, my assessment was based on his potential to improve his contribution. Given the demands of the market, the need for quick turnarounds, and the targets for next five years, I felt Jimmy is slowing us down. Yes, from the standpoint of emotional health of the organisation, too, I felt he is causing some unhealthy trends here... but he is a good guy. Shankar: But he is a good guy? Like ‘But Brutus was an honorable man!'Manika: Shankar, not like that, please! Jimmy is a ‘good human being', implies I do not have a complaint with his moral profile. It is his ability to be a good team player and contributor that I question... many others in the team are also disconcerted. He won't share information, will dodge, will not leave himself open to new thoughts and ideas, and is sort of feudal...Shankar: Do you think it could have something to do with having to report to a lady boss? Let's put things on the table Manika and see if we can sort the apples and the oranges... Jimmy has behavioural issues, okay. Is there a gender crisis? Are the dynamics of a lady boss and male subordinate causing all this?Manika: No. I have not sensed that at all. In all gender situations, there are some superficial discomforts and some deep-rooted discomforts. The superficial ones fade away soon as the environment evolves and grows around the senior lady's dynamics. Yet, funnily, the superficial ones are a precursor to what could lie deep within, the deep-rooted ones. In Jimmy's case, the superficial ones are normal. My moving to Office Products may have troubled him, especially after having had Chip Kalra. But it is something that will settle down.break-page-breakBut there is something else that Temple needs to address which is beyond gender, Shankar. Which concerns men and women managers. It is this ability to manage difficult decisions without getting entangled with emotion and social drama....Shankar (laughing aloud): Wow wow wow. I like this. Please say more...Manika: Shankar, we need to really template our behaviours for such moments. If not, we will never be able to do the difficult. Why is it that when we have to sack someone for non-performance, we get tangled and knotted? I am really frustrated. I am clear he has to go and then suddenly there is a question thrown at me, ‘Are you sure?' ‘He is a good chap...' Yes, he is, but it is not working for me! To run this show, I need people who are working from the intellect, not through a baggage of angst! It is not about young or old, it is about can or cannot.Shankar: Let me share with you. Two years ago, I had a marketing person in my team — very good man, intellectual, hardworking... all these are attributes that you bookmark as ‘must-haves'. Point is your hardworking and my hardworking and his hardworking are all different. Yet they all are ‘hardworking'. This chap, let us call him X, was draining me with his vagueness. I could ask for something and he would say, ‘Yes I will do it...' but he would say that every time I asked for it. Which meant he never committed to a date, never indicated his delivery, never told me what he was facing; He was older than me, had been my peer earlier in another division. There was a certain ‘hmm' quality to him, where all replies were an expression of wonder. So one never knew whether he was saying yes, no, can, cannot or go to hell.Believe me, it drove me up the wall. I took him out for a beer and told him what he needs to do about his communication, etc. He only nodded!To cut a long story short, the team had a breakdown when a task which had to be delivered got derailed because X, who had the information, did not reveal it, even knowing that the younger teams were going into the hinterland to rebuild the data. When a 360 was done and his case went into red, Tarla Saran of HR and her team asked me, ‘Is he good?' and definitely the question was about his goodness for the company as a higher goal. I said, he is intellectual, hardworking, single-pointed... none of which meant ‘he is good for my organisational purpose'. Somewhere I was saying, ‘He is not a nice guy, but he is intelligent.'"But don't you need nice + intelligent? How else can I ensure efficient team play? Then another of Saran's managers met me again to help me interpret the appraisal for him. This time I said, "He is zero personally, negative as a team player, BUT, he is intellectually capable."What was I doing? Dodging my guilt. Why guilty? Because somewhere inside I could not reconcile with saying this resource is not adding value, we need to replace. But each time I was seeing a human being, feeling bad that he had lost his wife, reasoned in my head that he needs to keep working (good Lord!), felt bad that I had to declare him dead stock... see?Manika: Heck... I know what you mean.Shankar: Manika... I was applying what I learnt from that interaction, on you. Because I could see exactly where you were coming unstuck. Saran & Co were asking me a simple question: should we retain him? I gave them facts — negative team player, zero personally, not a nice guy, but intelligent. All facts. But they didn't want facts! They wanted a decision!Manika (laughing full throated in relief): Yes! This is my problem, too! You are saying we are unable to take a decision, right? In fact, I don't want to. If it were possible, I would like to return him to HR and say, ‘Not working, doosra dey do!' But as a senior manager, I am expected to know what to do with a resource that does not work!And this I am saying Shankar, is an Indian phenomena; we do not know how to deliver bad news without identifying with it! Anyway complete your story... finally what happened?Shankar: Well, here was an opportunity to let him go. To remove a non-working part from the whole. But HR heard what they wanted to: he is intelligent. So they kept him! They heard much more than what I was saying. They concluded that ‘X is intelligent and Shankar is responsible for X being a poor team player!' So, he stayed on and continued to pull the team back!Manika: Wow! Does HR not hear or do they hear what is convenient for the time being?Shankar: I think HR has a template with a ‘standard manager' design. That standard manager is expected to be smart, savvy and perfect. Which means if he has a bad egg in his team, he knows how to say: ‘no, we should not retain him.' That is a cue for sacking the bad egg. Anything else you say is construed to mean: ‘keep him'.When it is as simple as that, why are we so confounded when we have to say, ‘You are fired'?Classroom Discussion‘Guilt is regret for what we have done. Regret is guilt for what we didn't do.' — anoncasestudymeera(at)gmail(dot)com(This story was published in Businessworld Issue Dated 13-06-2011)
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Let us ask a fundamental question: why do organisations exist? They exist to meet a need of society, providing an environment in which individuals can use their skills and strengths to collectively find a solution to this need. Human thought and effort are, therefore, central to the organisation. Are people then "costs", as Manika describes them, and not assets? For it is people that make organisations conceptualise, run and deliver products and services. Deven Vats, head of HR, reminds the others of something he had heard: idam na mama (this is not mine). When we consider the real reason for the organisation's existence, we understand our individual place in the collective. This can result in brilliant team performance like a great orchestra, where something beyond the wildest imagination of each member is created. Therein lies the reason why people come together in organisations. We know all this, yet organisations are ruled by conflict and ego. Perhaps our society is too individualistic, as so much of success is measured in terms of how the individual stacks up against others. This is not to say that individual brilliance is unimportant — outstanding organisational performance requires every single person to put his or her best foot forward.Organisations have to start with hiring the right people in the right way. And then build upon their strengths instead of highlighting their weaknesses. Worse, as in this case study, leaders tend to take people decisions based on opinion, without knowing enough of the individual's capabilities. Likewise, organisational decisions are not to be confused with individual decisions — each person has a perspective, but eventually, collective intelligence should prevail.Sangachadhwam (may we progress in harmony): The role of the manager in a team is that of stitching the people together, finding their strengths and helping them perform together for their larger vision. When organisations, teams or individuals have a larger purpose, they are energised, knowing what each is to do and how to do it — this curtails gossip. The discussion about teaching employees brings up a key shortcoming in the way managers think. Sure, organisations hire for what has already been learnt; but it is the duty of leaders to provide a context for employees to apply those skills. Learning never ceases — as individuals and as teams. It is unwise to brush the issue of learning aside as Deven does. New ideas and energy come in with new employees. Therefore, ‘integration' of a new employee is a two-way process. How often do we see enthusiasm turn into cynicism as the person ‘settles in'? Manika compares their own situation with the political situation that is developing. Her question about who would assume responsibility for the people is at the heart of understanding management's role. The description of "back of the envelope management" is interesting — it throws up questions about how deeply we understand and study issues before taking decisions. Very few people take the trouble to really understand an issue. Which is why perceptions weigh over facts in people decisions. Radical change in management thinking is required to create, run and lead organisations of the future, when change will be faster. Aggression can typically be seen in organisations that do not carry conviction in what they do. Manika describes the prevalence of aggression in the workplace as a reflection of the social context. Can organisations like Temple actually bring about social change? Deven highlights the importance of grace in managers. But is grace innate to certain leaders, or can it be learnt?Na brooyaat satyam apriyam (do not speak hurtfully, even the truth): There will be times when, for several reasons, people have to leave the organisation: lack of performance, little team co-operation, personal setbacks or new situations. It could also simply be that expectations have changed, but have not been communicated in an actionable way to the employee. Jimmy Sangma, for example, had outstanding technical capabilities but a style of management not suitable for Alsor. The way the message is communicated, sensitively and with respect, is important as it reflects the spirit of the organisation. It is not surprising that the young managers on Facebook had strong comments on this. Could Alsor have retained Sangma's value in some other way? Charles Handy's cloverleaf model is one way of thinking about how people associate with organisations.Manika says it is the company's duty to anticipate that people would want to know what has happened. Indeed, not enough attention is paid to this issue. It seems that fairness can only be achieved at the cost of humane-ness. Could we not apply a balanced scorecard approach to managing people as well? Finally, why communication should be honest and open is because only then can people work synergistically. That perhaps is the takeaway for management teams.Susheela Venkataraman is managing director of internet business solutions group, Cisco. Her consulting experience has focused on enterprise and community transformation(This story was published in Businessworld Issue Dated 18-07-2011)
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The way the narrative of this case opens is not a coincidence. It comes across like a metaphor, or a cinematic montage: "The new corporate campaign for Temple India's Office Products Division was ready and the marketing people wanted to show her what the feel of the ad would be when viewed between news as against between any other programme."So much care and diligence in making sure what gets communicated and how it gets communicated. The internal processes of the organisation also willy nilly get transmitted to the general public. We are in the midst of a time when there is communication or, more specifically, broadcast explosion. There are a host of new media forms. Referred to here are the ubiquitous social networking sites as well as the "gaining-in-popularity" case discussions in learning institutions, not to mention all the informal spread that is hard to track. Almost anything can come out into the public space for debate, comment and opinion. The reputations of people, much like brands, are continually evolving. The more senior you are, the greater the public focus. And how do these reputations form? What sort of collective process goes into it? How does anybody really know what the truth is?Sangma, a senior and experienced technical person, was virtually asked to leave the organisation because his behaviour left a lot to be desired. ("Sangma was not sacked. But he was asked to step off," clarifies Manika Singh. This shows her intention but the fact that people view it as a sacking shows how the opinion of the crowd has taken over.) His team was divided; backbiting and group-ism was prevalent; the younger lot were not being related to in a manner that inspired them, and so on. All these functions are perhaps a subset of what a manager is expected to do — work with the task and the people. In short, Sangma may have been great as an individual contributor but not as a manager of others. So when an opportunity came up, he was shunted out. The wisdom of this decision was questioned and created doubt. People in different forums — social networking sites and education — started discussing the matter and quite a few were more sympathetic towards Sangma. Manika, who had taken the decision, was left feeling misunderstood. Her intention behind the action was different from the negative reaction she was receiving. To my mind, and in retrospect (where one has the proverbial 6x6 vision), some attempt should have been made to help the person concerned become more aware of his negative behavioural impact and get support before a decision of easing him out was taken. But that did not happen. Now the consequences have to be dealt with.Then this comes out as a case and the ‘whole world' has some opinion or the other on it. The more vociferous and fierce successfully outshout the milder voices. It then comes back to hit Manika and perhaps damages her image in the larger public eye. Her reference to Kartik's story is also in the same vein: Kartik comes angrily from a perspective of righteousness to confront JJ on a breach of intellectual property issue. But the manner and approach results in the whole thing being seen as Kartik the drunken demon unleashing on a hapless and innocent JJ. Perhaps, over time, Manika too could be ‘demonised'! The just don't necessarily get justice.There are two critical issues here. First, it is very important to build awareness of oneself since we are all in the sphere of public opinion. Using the ad campaign as a metaphor, one would need to look at the possible impact this may have on others. The buy-in and support from key people in the decision-making process also helps buffer the decision and potentially provide perspectives that a single person may not be able to see. Needless to say, those one seeks opinions from regarding the decision should feel fully empowered to speak out and not be mere ‘head nodders' for the leader.The second issue is the management of the negative press that has accumulated. As Manika says quite wisely, "If we do not communicate with the employees clearly, then we too are going to be divided." If this is not done, the brewing and distortion can continue and spread to find its way into potential employers' dossiers.Recently, I had exposure to an organisation, emerging onto the international platform, that had changed its logo from a written word in English to a symbol. The perception down the line was oddly negative — many people could not relate to it. The logic behind the change had not been communicated. A senior leader put it in perspective during a meeting with a few managers. He said the aim was internationalisation, where a symbol and not a word could help establish the brand to a linguistically diverse global group. This immediately made sense to the unhappy managers. The communication clarified the intent behind the action. Without it, the quietly negative view would have persisted.Kaushik Gopal is an organisation consultant and leadership coach. He is an associate coach and faculty with the Center for Creative Leadership and works with Chatur Knowledge Networking(This story was published in Businessworld Issue Dated 18-07-2011)
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Manika Singh slid the DVD into its drive and waited for the visuals to play. The new corporate campaign for Temple India's office products division (OPD) was ready and the marketing people wanted to show her what the feel of the ad would be when viewed between news as against between any other programme.Shankar Kashyap, her erstwhile boss when she was in digital cameras (before she took over as CEO of OPD), was also present, waiting to see the effect unfold. Other monitors were placed all over the seminar room and different business heads and marketing heads were watching and making notes as the clip played over and over again in different combinations of news features cosseting the campaign.Presently, a news item began to play, where two central ministers were answering questions on the Lokpal Bill to the press. One of them said to a reporter, "You do not seem to understand how Parliamentary processes work." The other was saying, "You are so poorly informed!" One was pouting that the civilian team was using uncivilised language. The civilian team pooh-poohed that and said, "People of India have been upset for 62 years, so your getting upset now is very good." Then the ministers said, "The government is not going to get diverted by abuses and slanders." Another said, "If a poor man does not have a toilet, can the Lokpal bill help?" Manika paused the screen and asked the eight or nine people around to view the ad on another screen. Then, beckoning to Shankar, she pulled a chair and told him, "Sit, watch the body language, just watch... we cannot create this whole thing of ‘civil society' (as if it is a set of incurably ill people) and ‘us'..."... don't miss the posturing, that look which says ‘you poor silly civilians, leave daddy alone to do his work....' When you separate yourself from the grassroots, apart from looking foolish, you also set in motion a perception that you don't care. And this is the point I am making: if we do not communicate with the employees clearly, we too are going to be divided. All these comments here (on television) point to that."Last week, Kannan, Manika's colleague at Temple India forwarded to her excerpts from his Facebook page discussion on the ‘sacking of Jimmy Sangma'. Kannan said he had discussed the story as a loosely packed case study with his management development students at the college where he taught, and the students, young middle-level managers, had expressed some opinions on Facebook. "This will tell you what managers and staff usually take away from an episode like this!" Recap: Manika had recently agreed to replace Jimmy Sangma, a senior technical manager at Alsor, a sister company. While she admitted that Jimmy was a good person, he was not fitting into Alsor's new and aggressive context. Replacing Jimmy had led to corridor whispers on the propriety of such a decision; whereas contention had been that ‘good and intelligent' was not enough for a job function, it should include ‘team skills and amicability' as well, both of which Jimmy lacked.Kannan had taken the episode to his classroom and his students had posted their angst over management decisions on their student board, which Kannan sent to Manika. Replying to Kannan, she wrote, "These excerpts are indicative of exactly what happens when management does not communicate and employee managers take away a set of perceptions and huddle together and interpret things. "Take just one example, Kannan. Read the post of Manager X: ‘All these flowery words are nice to read, but in real life situations this is not how things work; when actual results are to be obtained then these case studies do not work.' "This is about all of us, Kannan. Recall, you had told me, ‘You are the one dealing with Sangma, you should know best.' And then you have gone and discussed this with a class... That strengthens my conviction that this concerns all of us. This is exactly the parantu factor I talk about. ‘You should know best, parantu...!' Talk which we cannot walk is called ‘flowery talk'."Kannan: Those are the management fraternity of the country. They are young today, but they will be running organisations tomorrow. You can see that they have very strong view points about sacking a manager... especially when he is also skilled!But Shankar said to Manika, "I want to see how you are going to deal with this. This is real life. To head a business includes dealing with backhanded ones." Manika (referring to Kannan and the Facebook chatter): This is how we do back-of-the-envelope management. To comment in passing, to opine from the periphery, to hold on to a viewpoint....! Management is not about viewpoints. It is about the point from which you view. And that point has to be non-personal. I don't know if the correct word is impersonal, but I definitely believe it has to be non-personal.... It has to view the greater good of a collective. I am not on television, Shankar. Nor is the issue of Sangma a News Time debate. The issue is serious and when I agree with replacing him, I am not replacing the person Jimmy Sangma, but a skill-set contained in the persona of Sangma that is not working for the organisation. I have my mind trained on the path that Temple India needs to be on. If Kannan's opinions have to be addressed, they need to come in a formal forum. Until then, I am not being baited. So if Kannan wants to be counted, we must have a formal discussion, where all views are factored in. Another post: ‘Oh yes! Juniors cannot give feedback to the seniors !!! Seniors ‘know', juniors simply adhere!' break-page-breakManika (to Shankar and Deven Vats, head of HR): This is perception, and this is the perception I want addressed. This can be removed when we stop gossiping about our people decisions and talk straight. The issue of Sangma needs to be communicated to all at Alsor in a way that we do not make it look like sacking, because Sangma was not sacked. But he was asked to step off. There is a difference to people management in today's times. Deven and I wish this difference to be made very apparent in an address to Alsor, where we talk about the dynamics of competition and business evolution and how when the context changes, the same people need not be right for the changed context. Because finally having people is a cost. And that cost has to return us a value. People here were hired in the 1990s, for an anticipated growth pattern for the next 15 years maybe. But while growth in quantity has turned out as targeted, the content has gone haywire! I mean, we were not able to understand where technology would go, where competition would emerge from and how much we would globalise. We were not prepared for the change. The changed context of the marketplace dynamics needs addressing. Educating people includes all this as well! No wonder then they talk about fair and unfair!Deven: To me, this is a huge example of communication: how important it is that everyone agrees to the decision made and then sticks with that single version. How does the management team work together? That ‘that was Manika's decision, not an HR decision' or vice versa? Not at all! During the vision workshop, we were taught that all thoughts and ideas belong to the group. ‘Idam na mama' in Vedanta speak; the management team objectively discusses to enable a decision that will be reached collectively. A decision has multiple contributors who collectively ‘develop' the decision. The team gets all the facts together, discusses them, understands why the decision is taken and then they all stand by it. Sometimes, people don't spend enough time to understand. They use ‘flowery words', which are often like macros, compressing a large learning, with quick opinion. So what happens is lack of common understanding, lack of internalising the action. And add to that the feeling of ‘my function', ‘her function' and you have the roots of a broken organisation. So once the decision is taken, a common script must be drawn up and given to the team that is allowed to speak on the issue. The rest must simply keep quiet and point people in the right direction. And then, as we say in change management, communicate pro-actively and before it hits, rather than after. The important thing is to not encourage gossip: the challenge with Jimmy Sangma's case is that it allows everyone to voice an opinion and most people actually do not have strong opinions, or at least, not firm convictions. They get swung by what they find in the outside world that appeals most at that time. No organisation should stoop to responding to nonsensical accusations, but they do have to find innovative ways to counter gossip and misconceptions. Shankar: Here is one more comment: ‘General Managers are ‘eccentric' , never seen a normal general manager!'Manika: No matter how hard we try, there will always be lunchroom discussions on ‘management is like this', and ‘HR is like that'. We must always ensure we have an honest exchange from a podium with our people, and only from that podium. We should not talk about different things to different people. I have always been deeply impacted by a situation at Infosys. It was a time when Infosys had a very delicate situation with an employee embroiled in a mess in the US. Narayana Murthy did not have three versions. He spoke once to the press and once to his people. To both, he said the same thing, no different. To both, he made it clear what the organisation stance was. Thereafter, he stopped and did not engage with them. And he has always been so. Speak once, speak correctly. If we do that, these perceptions of GMs will improve. Deven: I agree, managers need grace. Not everyone has it.Shankar: Yet here is one reporter from a newspaper who says, "Treat others the way you would like to be treated. Unfortunately, in high stress situations sometimes it doesn't work. I don't think firing is... cold. Different situations demand different solutions." Then she says, "Don't wait to be taught because no one will teach. If you have the passion, work those extra five hours and figure it out yourself." Manika: Again, points to perceptions. Why should there be a ghost idea about management? Why do employees come to think of managers, especially senior managers, as ‘people who sack', ‘people who teach', ‘people who do not teach', ‘people who treat'... If you hear closely, this is their experience of management, how they have perceived their seniors based on what they got. Organisations are a microcosm of our social context, and if we see aggression in the workplace, it perhaps comes from our social context. Or is it the other way — that because there is aggression in the work place, I take it home and unleash it on the family? Deven: There is a deep-level confusion about issues here. ‘Teaching' is not what organisations do. At least, not the kind of teaching this lady is referring to. Organisations hire people who have already learnt. This is a huge misconception that organisations must teach. This lady says ‘go figure it out'... I say, you cannot be employed if you are still figuring it out! So there is a fine difference here. Trainees, interns — we teach. Young managers or all managers are mentored. Knowledge and skills they pick up on the run after B-school. Shankar: Manika, the media lady's words — "Don't take things personally"— are equally for you. Don't carry more confusion with the perceptions surrounding Sangma's departure...Manika: Shankar! I believe, beyond the teaching and preaching, beyond the theory and practice, lies a human being who needs to have the courage to admit that theory is not often in sync with humane-ness. I have a strong sense of fairness and do not like to feel that I might not have done the right thing by the company and the individual. Deven: Why should that thought belabour you? We took the decision as a team, not as Manika Singh. Two, as you yourself pointed out at the start, Sangma was not sacked. He did not fit into the changed context at Temple, hence, we need someone different to perform his job.Shankar: Talking of courage, I must share this. My wife works with an organisation which has predominantly women workers and she laughs at me and says that only in male organisations are emotions seen more clinically, put under a scanner and laughed at. So ignore my ‘why are you so confused...' comment. Confusion incidentally is not a feminine prerogative. Recall I was extremely confused in a similar situation which I mentioned the last time. I guess men won't label their feelings, and men will call all feelings also as ‘ideas' or ‘thoughts'!Manika (smiling): So, to set confusions right, I also think that Jimmy did add a lot of value to us in his tech role and it isn't easy to replace his experience. But the difficulty with Jimmy was his personality, his lack of amicability. And since his job requires a lot more of team play, especially since all those tasks are rush jobs and need to be done in time, he comes a cropper. Deven: Here is one more: this student manager says that some people in top management actually prefer nasty people in middle management. Does he mean Sangma? He adds, ‘Aggressiveness is frequently associated with an ‘achiever' attitude. A majority of the actual task force is dispensable. And those few who aren't, can always be taken into the core team by some external incentives.' I really wonder if this is representative of the average manager thinking or is this pure interpretation. Jimmy Sangma's exit has resulted in a huddle and a posture. We should be moving ahead, not backwards... we will have situations like this and we need to have an open chat with Alsor's teams. Let me share with you a story that happened some years ago but has left us embarrassed. Some years ago, there was a huge backlash when Kartik was asked to leave for some ethics issue. It was done quietly so as to not affect Kartik, hence no one knew why he was asked to go. I had just joined Temple then. There was a process that we had leased from one DX, which was being used by JJ's team, where Kartik was a manager. Kartik had lost his temper with JJ, the user, over an ethical issue concerning breach of IP because JJ was using the process beyond defined areas. Kartik lost his temper, and used some choice modern expletives; an angry JJ pulled the roof down and Kartik had to go. break-page-breakThe management had pulled a blanket over the whole story. But JJ, unsoothed by Kartik's resignation, spread stories that Kartik had attacked him physically. Foolish, but there is no saying what anger leads one to do! Placement firms got to hear this story, they confronted Kartik, he got upset, he asked Temple to clarify and set things right. Then, in anger he reported to the process owner DX that there had been a bid to hijack his patents... and things just got from bad to extremely bad. Shankar: Wow... I didn't know the details. I was told Kartik had fouled up, someone said he was drunk... So who was wrong or were they all wrong or was no one wrong?Manika: Fabulous! See what I mean? Shankar, senior manager, who could have known the truth, also carried perceptions as truths! You cannot allow for stories to develop. It's unfair, patently unfair. HR may have good reasons for wanting to let things rest, but out there are human beings with minds that get doubtful, and their speculation damages!Deven: Okay, let me explain. Things had got so clouded by then, we didn't want to add to the confusion. It really was something we expected Kartik to handle maturely! Manika: But it is the company's duty to anticipate that everyone would want to know what happened. Silence and stoicism is sophisticated but damaging! * * *Now, here she was with Shankar and Deven in the seminar room, and the Lokpal debate. "Just look at all the posturing and huddling going on. Watch the ministers' behaviours, postures... this is exactly what management does sometimes. We do not seem to realise that employees get harmed even if they don't voice it, if you just sit and wait for things to cascade as it had done now with the Lokpal Bill. For 65 years you piled waste on the citizen and now you have an uprising!" Deven: We as HR can only convey the decision taken by the company and stand by it. We support the company's stance, as we should. It is expected of us....Manika: So if we compare this with the Lokpal Bill festival going on, who assumes responsibility for the people? See?This is at the heart of those Facebook posts. We are management and we cannot behave like ‘people'. We need to have a standard practice for communicating all news pertaining to employees, to employees. It is not nice to let things drift and not bring a resolution to things. Therefore I do think there should be a communication with Alsor teams as to why Sangma is leaving us, that organisations can ask a person to leave Temple, if it is seen that he has lost the context. More than clarifying the myth behind Sangma's exit, it will let employees know that growth demands everyone to grow too!"Classroom discussionWhat is at the heart of a leadership's inhibition to hold a dialogue with the people?casestudymeera(at)gmail(dot)com(This story was published in Businessworld Issue Dated 18-07-2011)
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The question of building one's own theatre space with a professional repertory company is the greatest challenge for Indian theatre today. And interestingly, more and more practitioners are setting out to do this — an exciting trend, though filled with the terrible dread of sustainability. ‘Brick and mortar' is always more difficult to maintain and a great responsibility as opposed to a freewheeling gypsy existence of a travelling theatre company. The questions that the case study at hand raises are natural. The outlook at Prithvi Theatre was to establish a professional theatre practice — by offering professional facilities to theatre groups, understanding their needs and thus enabling them to develop their own professional standards, and excel. It is this that powered its success, even if gradually. The ingredients are — theatre architecture (with the intimate thrust stage demanding a certain approach to productions and the open-air café lending comfort and ease), technical facilities (included in the rent), subsidised rentals, controlled ticket rates ensuring a wide audience and flexible timings, to name a few.Prithvi's personality is ‘only for theatre' — no dance or music, and no films. In doing this, Prithvi's business intent is clearly spelt out. Waltair, too, must avoid the ‘multi-purpose hall' trap. It will dilute their very role. At Prithvi, all shows are curated — it is not just a venue up for rent. Groups apply, and according to their history, aims and production standards, dates are allocated. There are no corporate events, ‘sold out' shows, birthday parties, etc. And yet, there are over 550 shows a year at this 200-seater auditorium, which sees over 74,000 footfalls a year. It took five years to build a community, both of performing groups and an audience, and the belief in this strange little theatre. Yet ours would be a disastrous business model. Run on inexhaustible energy and passion, its losses have been subsided mostly by sponsorship and in part by the managing trustee, Shashi Kapoor's immediate family. But then theatre is passion, not business. And passion seeks not profits.Our methods were possible because this is Mumbai, where regular theatre groups produce a quantity of plays, and a cosmopolitan audience that is thirsty for theatre. But 33 years ago, we did not have over 40 regular performing groups in Mumbai — today, we do.I would not say such a reality exists in Delhi, for instance. As for Vizag, Ammini has to make a beginning for a local, vibrant modern theatre to develop. Times have changed — with our lives being overwhelmed with technology and its de-humanising effects, the need for theatre and its human touch is that much more. The live experience of being actively engaged in a performance cannot be replaced by any passive electronic media.The main challenge is to remain sensitive to the needs of theatre. Or else, we could get caught up in looking at excel sheets, branding gurus and marketing schemes. Regular programming is a great establisher of habits — and developing habits contribute to a healthy audience who feels a sense of belonging and familiarity.Ammini and team cannot ignore quality. Modern proscenium- or auditorium-based theatre is only about 250 years old in India. This must not be confused with traditional or classical theatre, which is much older, but has very different ingredients. If she is looking for international quality in contemporary Indian theatre, she must be prepared for the long haul. We need more entrepreneurs in theatre willing to subsist on bread and butter.Non-commercial theatre will need corporate sponsors too. In most countries, this support comes from the government; despite cuts in most arts, the significant value placed on arts in political policy structures is prominent in all countries. Since government support is absent in this case, Ammini must seek partnerships with corporates. This can be done in many innovative ways, to mutual gain. Eappen needs to believe that theatre does matter to society. The rest is detail which will grow on its own powered by passion.Our happier story today is that after 33 years, even with our subsidised model of rent and reverse economics, we are finally able to subsist from the income we generate from theatre rent, café, bookshop rent and the interest from our fledgling corpus fund. Two major players in this transformation are our corpus fund and the fact that groups are confident of charging higher ticket rates, thereby paying us a higher rent. Times are changing.Sanjna Kapoor is director of Prithvi Theatre and artistic director of Prithvi Theatre Festival
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Is it possible to run a viable business in India with high ethical standards?Historically we have taken pride in our skills around pure sciences and mathematics; after all we invented the zero. This talent has morphed into cunning artistry of financial engineering, including having highly paid employees who ‘structure' tax avoidance. Some of these mechanisms are legal, but in most cases tend to be unethical. But before analysing the legal versus the ethical issues around business management, let us see why this occurs in the first place.Globally, companies are being run with a cutthroat capitalistic competition. The focus on the bottom line is intense and managers with profit and loss (P&L) responsibility face constant heat to improve revenues and margins. Promotion, compensation, incentive and bonus programmes are linked to a manager's ability to meet P&L targets. This, and a lack of strong corporate governance, prompt managers such as Samar to often push the boundaries of financial innovation to speed up career progression.The letter of the law is always black and white and stated either in bold print or in fine print. But matters of ethical wrongdoing are never outlined in a book. Ethics are embedded in the social environment, personal upbringing and in the organisation's culture. Samar's upbringing and education appear to be impeccable; it is his social environment and the culture of the organisation that are questionable. The classic phrase of jugaad — used to define resourcefulness or even an innovative way to get things done — is what Samar attempts.Academics have attempted to define professional ethics as using the same benchmarks of right and wrong as one would in their personal lives. If you do not steal from your parents' cookie jar, you are not expected to steal from your company's savings fund. That seems easy! But whenever possible, a majority of us bribe our way out of a situation. That is the paradox, and here is where defining professional ethics using personal ethics as a benchmark fails. At this stage, the organisational culture should kick-in to offset for any ethical malpractice.Culture can be the strongest tool for organisational change, or for organisational decay. Delana as an organisation has failed to embody a culture that requires employees to deal with the highest ethical and moral standard. The collective failure of the organisation to safeguard against ethical misconduct is in essence a failure of their cultural philosophy. But this failure should have been countered by Samar's manager Naren, whose role in this case is striking.Through the years, Naren has evidently trusted and mentored Samar into a position of power and responsibility. His reactions as the case unravels — from disbelief to denial, to shock, to partial resignation — is palpable of what Naren perceived as a breach of trust. However, through assumed responsibility, Naren is as culpable as Samar is, if not more. Naren's management style is questionable — specifically his ability, willingness and aptitude in setting up a process and system of governance to check and mentor an employee's progress while suggesting corrective action towards potential derailment.Samar joined Dalena at an impressionable age, and his experience was limited to his academic and personal life. He attempted to extrapolate his personal moral principles to his professional life. But his managers — from Inamdar to Naren — rewarded him based on his ability to circumvent tax structures and not his ethical standards.In the world of business, where the systematic and contextual dynamics are complex, the most important question is: realistically can a business be run with the highest ethical principles without diluting the end goal of maximising shareholder value? The answer is complex but, yes, it is possible.Many organisations have to marry two contrary goals of shareholder value and employee satisfaction. Whilst, not a template for success, here are a few points that can be implemented: Define the cultural ethos, including a set of dos and donts that are non-negotiable. Build an organisational structure where every employee is empowered to make it a better place to work at. Also, clearly outline roles, responsibilities and accountability. Implement a governance, employee engagement and a compensation model that includes the collective interest of all stakeholders. Through a catalytic form of management, attempt to institutionalise a culture where multiplicity of opinion is rewarded. Much like the adage seen on the back of trucks, ask employees to ‘Horn-ok-please' — speak your mind and speak without fear. Decisions raised through this process tend to have a greater probability of being actualised by our employees. Ishan Manaktala is managing director and head of Netik Asia, an STG portfolio company. He was the global head of trading analytics at Deutsche Bank in New York. He holds a dual MBA from London Business School and Columbia Business School(This story was published in Businessworld Issue Dated 28-03-2011)
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This case raises ethics-related issues at the individual level, at the organisational level and at a societal level. There is no universal definition of ethics. What is ethical in one society may be immoral in another. In India, we have traditionally had a very flexible approach to ethics. Centuries ago, Manu decreed that ethics is "situational". Even in the Mahabharata, our gods sacrificed ethics for expediency. In the New York Times, a columnist recently said: "At the heart of this condition is an important Indian character — the uncompromising practicality of the individual, ... Every person... will do what is most convenient to him... All rules and systems are subordinate to the sheer force of practicality..." His thesis: this is going to be India's undoing. That may or may not be true. But what is true is that lack of probity is a national malaise.This is the milieu in which Delana India operates, and the culture of which Samar Das and Naren Kant are products. The closest that I have come to a working definition of ethics is what Sir Adrian Cadbury said (in my words): If you have done something and can stand up in a room full of people who love and admire you, and you can own up to what you have done without any sense of shame, then it is probably ethical.The Delana case throws up the following points for debate and discussion: The responsibility for setting ethical standards in an organisation is that of the leader. And it has to be done both in words and in deed. There is no doubt that Kant has failed in this. If he was unaware of the various dubious goings-on in Delana, then he is either incompetent (not likely, because he heads a successful business) or chose to turn a Nelson's eye. The responsibility for creating the jugaad culture is clearly his. For example, while the breakup between rent and maintenance charges may be a grey area, the fact that cheques were made out in favour of several people who may not have been the rightful co-owners of the properties is clearly evasion, not avoidance. And clearly a failure of due diligence, a prerequisite in an ethical organisation. Although the line dividing tax avoidance from evasion may be thin, it is usually clear. Doubtlessly, in the Lathika episode, Delana crossed it and what was done was a clear case of evasion (illegal), not avoidance. Scams are seldom one person's doing. There is usually connivance at several levels. Every organisation needs to have an alarm system which goes off when something dubious is being contemplated. In Delana, apparently, there was none and the audit qualification seems to have come as a shock to Kant. Often, people in leadership positions tend to take an ostrich-like attitude. While there is enough evidence to show that one may get away with it once or twice, when dubious practices become institutionalised they tend to catch up with the perpetrators. That is what happened in Delana. Tax avoidance is, I think, ethical. Tax evasion is not. Taking advantage of tax incentives, which are usually given to incentivise productivity and investment, is perfectly acceptable. In Delana, the implicit message seems to be that bending rules to benefit the bottom line was acceptable. Sadly, far from uncommon in India. The gulf between precept and practice is evident in how the CEO lectures Samar about "fiduciary duty" without setting an example himself. Is the decision to shut down the Kopla plant unethical? In the absence of detailed assumptions and logic underlying the investment decision (over and above the tax holiday) it is difficult to pass judgement. It is not a good idea, usually, to start a business whose viability is predicated on tax incentives. However, it is clearly the prerogative of the owners to shut down a plant if it is no longer viable, unless it was a CSR initiative. At a societal level, tax evasion tends to pinch the conscience less if the tax payers feel that the government is not delivering the services that it should from the taxes collected, or is dishonest. It is also interesting how easy it is to justify wrong actions on the basis of what the others are doing, and is often used for numbing one's own conscience. However, this impinges on philosophical and other issues which are outside the purview of the present discussion. Finally, Kant is neither the first nor is he likely to be the last CEO who, when caught, blames his subordinates and tries to brazen it out. As, Charles Francis Adams Sr. said, "Failure seems to be regarded as the one unpardonable crime, success as the all redeeming virtue, the acquisition of wealth as the single worthy aim of life. The hair-raising revelations of skulduggery and grand scale thievery merely incite others to surpass by yet bolder outrages and more corrupt combinations."Does that mean that we accept dishonesty as practical reality? No, we should strive for the ideal. We are the only species that understands the concept of pursuit of excellence.Nripjit Singh (Noni) Chawla is an independent management advisor. An alumnus of IIM Calcutta, he has worked for 20 years in ITC and was the managing director at Max India(This story was published in Businessworld Issue Dated 28-03-2011)
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Samar Das slid the folded newspaper across the table towards the MD, Naren Kant. Samar had circled an item about a chief minister titled, "What did I do that my predecessors did not?"Kant said stiffly, "This is old hat. What has this to do with anything?"Samar: That is my question too — what unusual act have I done for you to impale me?Kant: Come to the point, Samar. Your actions leave no scope for humour.Samar: No humour this, Naren. I mean what I ask — what have I done?Cut to what Samar Das had done. In the tax audit, the auditors Bright & Thakur had slammed Delana India with the allegation of defrauding the government, allowing the use of SEZ (special economic zone) status (accorded to its subsidiary Newtree) by another with an intent to gain illegitimate advantage....Samar the CEO of Newtree, had abused the benevolence of the government, said Bright & Thakur, who had qualified the accounts of Delana India, saying: "We view these acts as gross misdemeanours... The qualification in the Audit Report is not negotiable as Mr Das has sought to enable." And in a telephonic chat with Kant, Cyrus Daftary, the senior partner had said, "Naren, appalling, I say! And please don't ask me to tone it down!"A distraught Kant had summoned Samar, one of the stars at Delana who was slated for active growth . Naturally, Kant was stunned.Samar who had been appointed head of the Newtree business four years ago, had awarded the construction of the eight-storey office to Lathika Construction Company as a turnkey contract which included the setting up of mini plants and installing various equipment..On cross verification, it was found that the purchase of steel, cement, etc., by Lathika was routed through Newtree's books as if a direct purchase by Newtree, so that Lathika illegally derived the SEZ benefits.Kant's ears burned with shame when he heard Daftary tell him all this. "Do you realise how many careers, images, names, equities are at stake? You are no trainee, Samar! And now you have the gall to sit there and say this to me?"Samar: Naren, it is easy to agonise, wrapping yourself in a blanket of sorrow. Dammit, all along each of you have made me do this!Kant: I don't believe this! I have a raving lunatic before me... Good Lord!This is what had happened. When Samar handed over the contract to Lathika, the chief at Lathika said, why don't you let me order the material using your name as if you are buying it directly? Samar agreed, negotiated with vendors of carpets, granite and glass, furniture and equipment — directly, and reaped all the indirect tax benefits that the law gave generously as exemptions for being in an SEZ. In effect, the purchases had been made by Lathika but using Newtree's letterheads.The only problem here was Samar had no business to straddle two stools, said Daftary. If he had a turnkey contractor, then it was for the contractor to buy the material. But now, as Daftary told him, neither Newtree nor Lathika had paid the taxes on material, so that the government had unfairly lost money. The flip side of this was that when the contract was analysed and capitalised as assets in Newtree's books as furniture and fixtures, office equipment, carpets, light fittings, etc., they had as a consequence of all above acts, been undercapitalised.Kant: Do you realise that you have cast a huge slur on your integrity as a result of all this?Samar: How does integrity suddenly enter?Kant winced; this was exactly what he had asked Daftary when he had questioned his integrity. And Daftary had said, "I will tell you where integrity comes in. There are two parties entering a transaction together. One is a very reputed MNC, large company, highly respected, trusted by the government, always presented as an organisation with good people, good employers, therefore ‘we also employ good people'. Delana is also considered a respectable unit of society, especially since your tag line reads, ‘We do business in an ethical manner''."Kant to Daftary: That agreement to tweak the billing happened in the individual capacity of Samar Das! That fellow did not call me and ask, ‘I am going to do this, is this okay with you?'Daftary: Either you are naive or I am a monkey's uncle, Naren. When Samar Das as a senior manager acts on behalf of his business, that act is an act Delana has done. What is in it for Samar when he agrees to this with Lathika, yes? Every manager has a responsibility to get his job done at a lower cost. So he gets his brownies if he negotiates to save costs. He is then an example for others — "Dekho, what a good boy hai!"The corporate world is keenly aware that tax is present at all stages in every transaction that entails creation of product or service, yet most companies and individuals consider it a wasteful spend. The corollary then is, a good manager is one who cuts taxes. Don't protest, Naren. All my clients hire me for exactly this reason. There are n number of discussions on what can we do to change the incidence of tax, and many of these discussions border on the unethical or use interpretational ploys to save taxes.break-page-breakCompanies take pride in reporting their effective tax rates (ETR): "From a high of 23 per cent taxes, we have managed to bring our ETR to 15-16 per cent thanks to aggressive tax planning measures...".Back to Kant and SamarKantThis is definitely not what we expect reasonably intelligent business graduates to understand of ethical behaviour. I have to rethink a lot of how I staff my organisation!Samar: I am surprised you should paint me with horns and fangs. Why don't I tell you how it all began, so that you can see how it begins?Kant was appalled by the nonchalance as Samar, adjusting his sitting posture , began..."Nine years ago, when I was an accountant for Milk, Foods & Health business, Anant Inamdar was heading it. On 31 December one year, the sales team raised invoices well after 5.30 pm which was our audit cut off. It was 7.30 pm and they had just convinced a huge wholesaler to accept goods. The value of the invoice was, if I remember right..."Kant: Cut out the details please!Samar: Very well. So I had signed off the sales ledger, the last Goods Outward Note (GON) had been double struck and signed by the factory accountant and the last number had been fed into the system. Anant said to me "Samar, ask your boy to scratch off that GON and make a new one. More sales have been ‘made' and we need to ‘back time' them." I told him that 5.30 is 5.30 and I was not comfortable asking junior staff to do hanky-panky stuff. (Kant shuddered at this point)He looked at me for a long time then shutting my room door he said, "In your last appraisal you said you wanted profit center head responsibility. My dear friend, responsibility is meeting top line, meeting bottom line, meeting targets and that includes all this..., hmm? Where do you think your 12 per cent increment is going to come from? If this is ‘difficult' my dear chap, fat chance you stand of qualifying for the Newtree vacancy!"That was how when the Business Head position for Newtree fell vacant, Anant pushed my name for it because the whole setting up, negotiating, etc. needed a huge commerce sense.Kant: What's your point, Samar? That Anant is corrupt? That he put you up for corrupt practices? That you were pure as driven snow and were forced at gun point?Samar: Oh! Why do I sense you are angry?Kant: Yes, I am angry. Yes, yes, yes! You work 17 years in this organisation, partake of all the largesse, the teaching and the learning and blame your integrity on Anant? You have done a lowly act Samar, be a man and accept that first!Samar: Hmm. Let me see... what was it that I was replying to? You have chosen to replace the original question with your anxiety. Ah yes, this is what you had said Naren, something like "this is not what we expect reasonably intelligent business graduates to understand of ethical behaviour". I was replying to that, Naren! Maybe you want to examine what was ethical about Anant's ploys?Kant: You say ‘ploy'?!Samar: I say ‘ploy'! Yes I do! He was holding out a veiled threat to me or say, carrot to me to toe the line if I wanted to move up the ladder. And today when I do the same on a larger scale, you call me "a slur on integrity"!Kant: Samar, can we cut out the theatrics, please? I am here to take away an understanding of where you went wrong! This is a company very high on ethics and integrity, Samar, and it pains me to see you make a meal of your career!Samar: You clearly harbour some illusions about business graduates and senior managers. Let me take you back in time.In 1993, I joined Delana India as an industrial trainee. My father worked with the electricity board as a petty engineer doing thankless jobs and it was his desire to make a great man out of me. Yes, I belong to that transiting India where fathers did boring government jobs and mothers coughed over the cooking pot. So I did my cost accountancy and then a second tier MBA. At 24, I still held the values of my parents very close to my heart.When I joined Delana, everyone told me what a wonderful company this is… great people, law abiding, no one takes or pays bribes, honest…. At the orientation, nine different senior managers addressed us 25 trainees with stories of great men and great stories of small men. Then I was posted in the Kopla factory. It was a very distressed area given to a lot of Naxal activity, and I wondered why we even had a factory there. They told me that the government of India was incentivising development of backward areas, and Delana offered to set up a factory there in Kopla. In return, Delana got a seven- year tax holiday (TH).When I was sent there, the TH was over. Activity was low, the overall mood was bleak, workers were argumentative, the factory head was irritable because he was losing money... After seven years, we were having to pay excise and everyone's mood was spoilt.Seeing the factory working at 60 per cent, I asked the factory manager, how come...? He said the freight cost from Kopla to the markets , was prohibitive, and we are deliberately downsizing, capacities have been shifted to other units and I ask him what is the plan, and he says we will shut it down.In the three months I was there, there were two strikes, 42 per cent of workers were paid off, one gherao... and I sit there wondering. We had been given that TH to enrich the place, to develop it, to create employment, to bring hope to a people, to incentivise which, the TH! But we took the TH, and left after seven years. Was that partnering the GOI in development? What happened to the hope of the people?break-page-breakWe knew that the delivery to those areas was going to be expensive anyway, then why did we accept the GOI offer? Kopla was a pretence!So where is Delana that was touted as ‘does the right things'? At the age of 24-25, I was watching Delana bend the rules and reshape it to adhere to their definitions. Could it be that they misunderstood the spirit of the tax holiday? Could it be that they think they were expected to be here for seven years only? Can the GOI be stupid? Is that the right thing? Or am I stupid? And thus my mind raged and raged...Kant: Cut out the verbal blogging, Samar, and get to the point!Samar: We are at the point, that's how funny it is! What other point can one get to from here?My ‘cutting the milk tooth' moment happened under the tutelage of Bharat Maini, who was then the head of Commercial when I was posted in Accounts department.Our rent costs were going up every month as we were hiring more managers. Now there is a service tax paid on rentals. Every commercial contract has a rent element and a maintenance element. So a lot of effort went into converting rentals into maintenance to ‘save' 10 per cent tax. And that was my job too. Maini had a boss who took him out for a beer if he ‘saved' the 12 per cent tax on a new rent contract!I didn't know all this. I would go to Maini and say "Sir, if there is so much maintenance we are paying, surely this property is not worth renting!" and he would shoo me away saying, go do your work! But I worried about how much was being spent on maintaining rented property.So I made a spreadsheet and showed him how the maintenance was stupidly high. That was when he did this calculation and showed me how much we saved as taxes! My jaw dropped, but Maini said, "If you want to be a dull munshi, you won't go far in this organisation. Do some creative accounting, the sky is the limit!"My great moment came when I geared some rentals for Maini. One of the penthouses we rented at Ha-Ha Home was offered at Rs 50,000 per month and belonged to one Mr X. I said to him naively, "Let us account for this creatively, please?" He was very pleased… and like a true mafia trainee, I committed my first felony. The law said if the annual rental value (ARV) paid is in excess of Rs 1.2 lakh, you have to deduct tax at source, called TDS, and deposit with GOI.So under guidance from X, I broke the rentals into five parts, X would show there were five co-owners, and Delana had to give him five different cheques in different names. In return, he reduced the rent from Rs 55,000 by Rs 7,000 — Delana was going to save a lot as rental costs.Kant: I don't believe this... dammit you are lying. Any idiot will ask to see the sale deed before renting the property! Then you will know there are no five co-owners.Samar: That's the beauty. And incidentally, this was how Maini too objected! It was simple. X had to just declare that the property is owned by five different people.From simmering vein-busting anger, Kant had now grown intrigued. "Understand this, and this does not require an IIT degree. You have a fiduciary duty to ensure that the person with whom you are contracting is in fact the owner of the property.Samar: I agree. Delana has the obligation to check the sale deed but it does not do this. Can't you see, since each cheque was below Rs 10k, there was no TDS, hence X won't come under the scanner? He could bank the cheques in an undeclared account and have fun?"So if Delana is goody two shoes, and says no no I will pay one cheque only, then X will charge us Rs 55,000 and after tax paid to GOI, X will earn only Rs 40,000. Instead he showed me the way forward. He said pay me Rs 48,000, in five cheques; also 30 per cent of that I will show as maintenance, not rentals; I will save service tax (15 per cent on the maintenance portion) — I don't declare all of this as income, so my Rs 15,000 gets saved, and I will give you Rs 7,000 out of my Rs 15,000 as a saving in the rental cost, so that instead of 55 you will pay me 48." Kant's mind reeled. The calculations were fast, the intrigue too much... in a devious way he had to admit these guys were very smart, even if it was a kind of smart he did not subscribe to.Samar: Maini was delighted. We copied this on all flat rentals, divisional profits looked better. And since Delana doesn't make a TDS, there is no link to the landlord and hence X can choose to not declare the income! You understand?Was I doing this to cheat the GOI? Nope! I'm doing this to save my bottom line. If I can save Rs 7,000 in the rent line, I can spend more in the advertising line, see? That is so much more better for my top line, my visibility, my blah!Kant: Not ‘realising' is worse than thieving! I cannot buy this line of argument, sorry. It only means the strategy ideation was not all inclusive, it has been done only from your personal standpoint, to gain, to win, to look good! Considering how many hundreds of crores are lost to the GOI in taxes, can you think that we could have bought bullet proof vests for ATS Karkare?Samar: Or Raja would have several crores in Seychelles. That is another rationalisation!Kant: Karkare did not have a bullet proof vest because his department did not have the budgets, but uniquely Samar, they had a resource like Karkare to save Mumbai!Samar: It depends on who is rationalising and how. I can say other Indians are not paying taxes, so why me? Recently, I met the CFO of Kosta India. His company used pirated copies of all software, and his rationalisation was, "The original costs Rs 16,000. Who pays so much? Nobody does." This CFO also told me, "We pay our taxes." So I asked him, either you don't know that you have an obligation to pay for intellectual property, like the operating system, or you don't pay everything you owe to people!He said, "I agree. This is a concept of not guilty by association because everybody is doing it!""Naren... you will sack me I know. But this minister (said Samar pointing to the newspaper article) did not get sacked. His argument was the same, ‘The guy before me also allotted land to his family, what wrong have I done?'"Classroom DiscussionAre acts that are legal, also ethical? Are companies preoccupied with only being on the right side of the law?casestudymeera(at)gmail(dot)com(This story was published in Businessworld Issue Dated 28-03-2011)
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