Naren Kant walked into his office and was surprised to see two people already at work there. Dhananjay Singh, the admin head, was pointing to some electric points under the table while another man was busy fixing wires and things. "Good morning, Naren! Installing the conference screen, and your new desktop has come, too. This man is from Talcy," said Singh.Kant shook hands with the engineer and admired the flat screen he had been allowed by Delana India. "It's a privilege to be the MD," he said laughing with Singh, who looked at the engineer and said, "OS installed hai? Achcha... okay, CD hoga...?" The man said, "Yes, yes, I have brought a CD, load kar deta hoon, sir...."Kant was confused, "You mean the computer does not come with the OS?" The engineer shook his head. "You can choose to buy ‘with OS' or without..." Kant was still confused and asked, "Then how is the buyer expected to use the PC?"Talcy engineer: Pirated, sir, pirated! PC is also meaning ‘pirated copy'. Sometimes also Priyanka Chopra, ha ha ha! It's simple. Kuchh nahi hota hai. For you also I have PC....Kant: Does your employer know this?Talcy engineer: I am from dealer, sir. Not Talcy direct. My boss says if customer won't buy, take out OS and offer as discount, then put PC. PC equals pirated copy, sir.The engineer's smile was heartbreaking. Kant said, "Piracy is same as theft, you understand, no?" The engineer grinned and replied, "Sir, saare karte hain! Rs 16,000 is a lot of money. Usme fridge aa jata hai, sir!"Kant gave Singh a withering look and told the engineer he should kindly take back the desktop and get him one with original Windows. When the engineer had left, Kant looked at Singh with his hands on his hips, "What is this? I don't understand why should a company sell only the hardware without the software? God also sends man to earth with his brains installed, no? So why sell a computer without the software?"Anyway, I don't want us to be buying pirated copies, please. Let me call Raju Pandit (chief accountant) and ask him."Pandit said: "Everyone has his own trip, Naren. Last year, when we set up a new sales office in Bangalore, I approved a capex for 36 PCs. The budget was of Rs 60k each and I told them the model and brand of computer to buy. When the bills came, the branch manager submitted only the hardware bill. He had saved on the OS cost and had the dealer give them pirated ones!"Kant was disturbed. When he met his board at 11 am, he asked, "Do managers have to be told to be ethical? What shocks me is that it did not faze Pandit when the Bangalore office saved money on original copies of the OS. Why? Yesterday it was Samar.... unfazed." RECAP: Samar Das was the head of Newtree, a business unit of Delana India, located in an SEZ. Auditors Bright & Thakur had qualified the recent tax audit to say that there had been fraudulent misuse of its SEZ status, an intention to cheat, etc. Samar had deposed before the MD, Naren Kant, that he had not done anything that others had not done before him (see ‘Tax Planning: The Stock Option', BW, 28 March). Instead he argued that he had been trained to lead a life of avoidance in the garb of tax planning, bottom line management, proactiveness, and so forth. He claimed that every Board member who had benefitted from his being the tool for all this, now feigned alarm, accusing him of "corrupt practices and lack of integrity".Kant continued, "Then I began wondering, are we really law abiding? What is law abiding? It is not merely following the law. It begins with accepting the law! Law is not up for debate. Now when I see what Raju Pandit says, what Samar said yesterday, I ask, is our claim that we are ethical, misfounded?" Then, after a long pause: "Was Samar Das wrong or right?" Voices muffled and feet shuffled — a garbled emission of sounds, and Kant continued..."I find we are all in the grey zone where corporate ends and individual means appear divorced; where corporate goals are seen as wars to be won for Delana. The grey zone is made of good managers from good families with good education who negotiate to gain fraudulent savings on a rental bill or use pirated software, which they justify saying, ‘others are doing it too!'"Are we the grey zone guys? The corrupt thieves? The Jekylls by day who Hyde by night behind this company, which is touted as a clean company, where we tell our customers our products are dependable because we are a dependable company! Where we are touted as a good example in b-schools... Is the grey zone manager the one who has failed to think?" Jatin Roberts (director): Naren, many are in the grey zone. It perpetuates because when I see the other guy getting away year after year, there is a cause-effect that tells me it is okay to not pay taxes. Why did we shut down our Kopla unit? We began to lose money on our product! The entire seven years, too, we lost money. The tax holiday was barely enough to see us through. Why did we accept the offer? Because we wanted to do something for the government of India (GoI). Did we not know that it was going to be a loss proposition? Yes, we knew. How did the idea come up? Recall O.P. Sharma. He had met with the commerce minister that year; the minister was from Kopla and so was O.P.. The minister said, "O.P. saab, hamare Kopla ke liye kuch karo bhi" So O.P. said set up a unit there, and we did. The next year O.P. retired."See Naren, you know, there are always compulsions. Business is like that! We developed Kopla and the next thing we knew, many regional brands mushroomed. The consumer was happy with the regional brands. What were we doing there trying to survive? Samar can say what he wants... I know the truth!"break-page-breakNaren was deeply confused. What compelled people to abandon logic? There must be something to show for our past — we, the few, who had the opportunity to live with respect. Why are we compromising? Managers from good homes, good schools, food three times a day, always had a fan and light in the home, always had shoes on feet. "When you come from a background of strength, faith and balance, why would you give all that up to do something so lowly?" he asked.Dhanesh Pillai (all-India sales head): You know, Naren, it is exactly such a person who will get extremely upset when he encounters another refusing to play the level field. When he gets into the competitive market and sees others breaking the rules to get ahead, he says, why should I be losing? His boss is weighing down on him saying ‘you are not able to do anything about these guys...' Does he live with his boss thinking he is useless or does he get up and make the competition feel useless? Life out there is tough, Naren!Naren: Are you saying the ends are more important than the means?Were they disagreeing with him? Or were they saying you need to change the way you think? That night Kant met Alex Roy, an organisational behavioural specialist who advised Delana from time to time. "Do you agree that even a person of good stock can be made to bend and break the law in the face of competition? Aren't values sacrosanct after all?"Alex: If a person is competitive, he might end up chasing the other person's way of working. But if his value system is well rooted, he won't change his approach to work as in gundon mein gunda, shareefon mein shareef (A thug among thugs, a saint among saints)! How much of your brand equity comes from values is a serious part of building your corporate equity, Naren. I am, in fact, doing exactly this work for an organisation.But to give you an example, take two hospitals, say, Innova and St. Martha's. Innova would not worry about giving Diwali presents to the GP who recommends them to patients. But a St. Martha will not do that because they are rooted in the missionary way of work. Yes, they will modernise, have wooden parquet floors and smart light fittings, like Innova, but they will not change their approach to work. Ethics are the substratum on which organisations are built. In other words, whatever your ethical framework, that will play out.Kant: Then what is Jatin saying? Is he saying something has changed? What has changed? Alex: The definition of success and the value that is placed on one kind of definition of success. There is the organisational culture and the societal culture. The societal culture had not harmed them. But the definition of success within the organisation has harmed them.I understand there has been an unexpected turn in behaviour at work... Some time ago, we were rocked by Satyam; before that, Andersen; before that, Enron.... In all these cases — don't be alarmed — they said the leadership leads behaviours. These companies were in stage C of a certain behavioural disease. Take a look at the macro substratum on which all this is being played out. People ask me these days: is the ethical framework at the national governance level being mirrored at organisational and individual level? The leader says ‘I cannot be responsible for a coalition'. But when the coal, energy and telecom ministries were called ‘any time money' ministries, you did not change anything about the way you governed, no? You gave away these ministries knowing that money will be made from them! This can be called ‘not doing all that needs to be done'. So Delana will need to scratch deeper and examine what it needs to do, so that you don't let it precipitate to stage C!Naren: I know that the marketplace demands your soul in exchange for success. But I also know that there have been many who have not succumbed. Is it a kind of person who breaks or is it a kind of circumstance that bends you? I really want to be able to see the fabric if it was possible.Alex: The end game is surviving the onslaught of temptation, being able to see temptation for itself... That depends not on the personality of the person — as a person I am a competitive personality, and I want to beat them at their game, yes — but survival depends on values; my value system takes precedence over my personality... my values are so integrated into my personality that I won't let the competitive bits of my personality take charge. In Sanskrit there is an apt word for this, vasana. These are ‘tendencies' in my personality, some dormant, some active. So, say, competitiveness is active in my personality and it gets activated owing to being present in a competitive environment, such as business. Equally, there is a tendency in me to be dishonest, but it is not active in an environment where dishonesty is not active. Then you encounter dishonest tactics in the context of competitiveness... the mind then gets excited. What reins you in or frees you is your values. Mind you, even honesty is a tendency latent. We have positive tendencies, too, but what we activate is a function of intellect. What gets activated is, to an extent, a function of the environment, too. The determinant, then, is the value system. If somebody changes the goal post, am I too wanting to do what others are doing?Naren: So what we have here is: what a manager says about survival in organisations requiring me to do this or that is a moral excuse. It has been my experience that as a businessman if you do not stay within the framework you have designed for yourself, you will veer towards exploiting opportunity by being reactive, but you will not be able to survive as an organisation...Alex: Correct! Today a set of managers may ‘interpret' the law, rearrange variables to enable a certain tax benefit — avoiding tax and calling that planning tax — and thus achieve one goal; tomorrow they will do worse... like Satyam, playing with changing goal posts. Yet, Naren was not satisfied. Personality and value systems were thus explained, but did humans need to be herded or shepherded all the time to be reminded of their value orientations?Naren met his HR head Kaustubh Mehta that evening to examine what Delana needed to do to relieve Samar Das, but importantly make good the past sins. "Why do perfectly raised human beings find the devil attractive, Kaustubh? I am so bothered by Samar."Kaustubh: First of all, Naren, I will still say what Samar did was not intended devilry. It was playing with power and enjoying its risks. Like people who love guns for the power and then use it unwittingly. Mindless, of course. Two, there is the competitive side: bhala uski kameez meri kameez se safed kaise. The corporate world is exactly this. Three, organisations selling similar categories, both brands doing very well, and then you want to be the better of the two. So you use advertising chatter to massage your ego. You use promotions, endorsements, etc. Tax avoidance is just a part of the same continuum. If not, why would you not want to pay what is legally due or payable? Because in reporting a better PAT (profit after tax) you look better! break-page-breakFour, many a times, many of these unethical practices become standards. So somewhere tax avoidance is degenerating to a stage where everyone you meet is accepting that paying taxes is a pain. Let us be honest: when R.J. Mehta (ex-MD) accepted the GoI's offer to set up a plant in Kopla, did we do it for the love of the country or because paying taxes was a holy pain? We did it for the benefit that would accrue to us, not for the benefit it would give the country. I am not sure, I don't have an answer, but I am grappling with all the tax gearing we keep doing with salaries all the time... pay more of this, less of that, not this, but that... what is all that, Naren? And it is getting to a stage where ethical people are joining in without guilt!A few days ago, you were upset that our people did not seem to think that using pirated OS was thievery. I asked some of the managers this over lunch. It was just guilt based rationalisation, Naren. More like retaliation. You seek this justification and then you make the leap of immorality, thus also blaming the manufacturer for your sin! ‘If he had sold it with an OS, I would not have done this!' Likewise, avoiding taxes or messing with it is our way of being very angry with a government that penalises us for the good work we do! And on top of that to siphon out tax payers' money to build statues or give to family! ‘I am angry with you' is also a rationalisation! Naren: Kaustubh, we evaluate people in every which way before we hire. We ensure we are hiring from good stock... how come then? Kaustubh: It is the temptation of the consideration. What you stand to gain is greater than what you stand to lose. This is wagering! Perception, of course. Next time you are returning from Brussels, pause at the green channel at the IGI airport and watch how many women wearing chunks of diamonds walk through customs not declaring their purchases; how many people are wearing 4-5 watches. The temptation of the consideration versus probability of losing image.Let me share with you a deep HR crisis at a large company. I am part of a lab where this is being discussed with a view to finding solutions. There are four very senior managers at Company K India (CKI) — the CFO, the accountant, the business head and the president — whose bonuses from international depend on certain performance parameters, chief being, cash flow on the last day of the year. On 31 December, year-end, Rs 47 crore advance tax was payable. If it was paid, they would fall behind the cash flow parameter. If that happened, then the bonus implication (forfeiture) was upwards of Rs 20-25 lakh at the maximum, Rs 7 lakh at the minimum... okay? The advance tax was well budgeted, so it was not a surprise element. But the crisis arose because some supplier bills of Rs 60-75 crore were urgently payable because of, I would imagine, a similar teeming and lading in the past. Since the suppliers threatened to suspend all scheduled supplies, a balancing act was needed. The business head asked the chief accountant to delay the Advance Tax payment — pay it on 8th or 9th, chalega; 4 per cent penalty pay karo... if asked by audit, say you clean forgot. We will, in turn, work out 1 per cent further rebate from suppliers on future supplies to make good the penalty that will impact bottom line. Promise! Naren went white. "This is shocking!"Kaustubh: Yes. The lab is discussing the warped sense of quid pro quo. The whole ethical issue behind four people taking decisions that topples a corporate image and equity. And, four people who agree among themselves to negotiate prices as consideration for partnering or, say, aiding and abetting an unethical, unlawful criminal delay of advance tax payment... See what is going on at a deeper level, Naren. The guys who could influence the suppliers to accept a delay in payment have no business talking to suppliers. That in itself is a major control weakness in the system. But if the accountant helps them achieve their target cash flow, they promise to help the accountant achieve his cost efficiency target. After all, his 8-9 lakh bonus is also at stake!Naren and Kaustubh looked at each other dazed. Kaustubh grimaced and said, "And these are all ‘good people from good backgrounds'. Where is the genesis of this? Competition. Consideration! Not achieving that cash flow would mean a loss of 25 lakh each on bonuses... see?"We avoid taxes and legitimate costs because we feel the recipient is unfair in asking for it!"To be continuedClassroom Discussion Incentives and bonuses are short-term and tactical in spirit and prone to abuse.casestudymeera(at)gmail(dot)com(This story was published in Businessworld Issue Dated 11-04-2011)
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In the Harvard Business Review issue of September-October 1987, Sir Adrian Cadbury wrote an article titled Ethical Managers Make Their Own Rules. Parts of it are reproduced here: In 1900, Queen Victoria sent a decorative tin with a bar of chocolate inside to all of her soldiers who were serving in South Africa.... At the time, the order (placed on Cadbury) faced my grandfather with an ethical dilemma. He owned and ran the second-largest chocolate company in Britain, so he was trying harder and the order meant additional work for the factory. Yet he was deeply and publicly opposed to the Anglo-Boer War. He resolved the dilemma by accepting the order, but carrying it out at cost... made no profit out of what he saw as an unjust war, his employees benefited from the additional work, the soldiers received their royal present....My grandfather was able to resolve the conflict between the decision best for his business and his personal code of ethics because he and his family owned the firm which bore their name. Certainly his dilemma would have been more acute if he had had to take into account the interests of outside shareholders, many of whom would no doubt have been in favour both of the war and of profiting from it. But even so, not all my grandfather's ethical dilemmas could be as straightforwardly resolved.How many of us would even think of this as an ethical dilemma? How many managers in a cigarette or gutka company see any ethical dilemma in selling a harmful product? They can justify it on the grounds of "earning a living". Such rationalisations annihilate personal ethics.Ethics is all about business and social interactions based on the belief that the self and all others deserve equal consideration. Ethics are dictated by the leaders. If there is no explicit code of ethics (COE) in an organisation, an implicit code develops, which can be dangerous because it is open to multiple interpretations. And if the explicit code is observed more in the breach, as in the government, then people tend to follow the implicit code.We know that our national leaders' rhetoric against corruption is hogwash. The code of conduct, implicitly communicated, seems to be: "Every man for himself and the devil take the hindmost!" There is frequently a gulf between people's ‘professed' and ‘espoused' philosophies. That is how capitalism thrives in communist states, and why our lawmakers are lawbreakers.Writing and communicating a COE is vital, as is a code of conduct for all employees. An explicit COE is like a map. If everybody does not operate by the same map, they will go off in different directions. Clearly, in Delana, there was no COE. In fact, the conflicting messages could potentially unleash a schizophrenia epidemic in Delana. When Kant asks, "Do managers have to be told to be ethical?", is he being naive or is he in denial? It is the bounden duty of management to communicate the COE to all employees. It also needs to be understood that ethics is not synonymous with legality.Tax avoidance (taking advantage of favour-able tax laws) is not necessarily illegal, but it may be unethical. Legal compliance is a necessity, but not a sufficient precondition to being ethical.In life, difficult questions have to be constantly answered. Is it more important for me to win or be ethical? The answer has to come from deep within. In the corporate world, I suspect, widespread cardiac diseases are not only due to sedentary and unhealthy lifestyles, but often because of conflicts between one's beliefs and actions. Sadly, corporate success (read politics) frequently requires one to bend one's ethics. The ‘headline test' is a good one: am I happy to have my actions reported in tomorrow's headlines? If yes, go ahead. Employees focus on what is measured. If competence is measured on the basis of the bottom line, then that becomes the focus of all effort. I personally do not know of any company that measures and rewards ethical behaviour. Delana is no exception.In many ways, Delana is a microcosm of society. Socially, we revel in discussions on ethics. How can people from good backgrounds have dubious standards of ethics? How much of a company's brand equity comes from values, etc.? And yet, how many companies have a regular ethics audit? It is comforting to have drawing room debates on such issues because it externalises the problem leading to that warm ‘I-am-okay, you-are-not-okay' feeling. We bemoan the lack of ethics and morals yet how many of us have the courage of conviction to stand up and be counted? Does any chamber of commerce require all its members to sign a code of ethics? Does any industry body or company stand up and warn corrupt politicians or a state government that it will curtail or pull out its investment if the state does not clean up? No. Because adherence to ethics needs both courage and sacrifice.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 11-04-2011)
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Naren Kant's experiences at Delana India truly represent a leadership crucible for him. He has few choices before him and those represent diagonally opposite stands. From buying pirated operating systems for company machines to fraudulent misuse of SEZ status by a subsidiary company, Kant has much to worry about. When he took the issue to the Board, which is where the operation ‘clean up' has to start, one member responds that evading tax is part of running a business, and even elevates it to a ‘level-playing field'.Kant's situation reminds me of what Jim McNerney faced at Boeing as its CEO. Boeing was going through a serious crisis of confidence and was in the midst of scandals. The Department of Justice was probing its misdeeds including: a) improper acquisition of thousands of pages of rival Lockheed Martin's proprietary documents; b) illegal recruitment of senior Air Force procurement official while she still had authority over billions of dollars in other Boeing contracts, and more. McNerney sized up the situation, and recognised that how he handled the crisis would be a watershed in his leadership and, at the same time, provide him and Boeing an opportunity to transform the company's culture around ethics and opportunity. McNerney did not waste his time contesting in court, but quickly acknowledged the wrongdoings by his company's senior executives and paid up the $615 million in agreement to settle. Kant, too, can determine his company's future culture. Easier said than done, of course. An organisation's culture is often defined as behaviour that leaders practice and tolerate. Unfortunately for Kant, the leadership of his company in the past has both practiced and tolerated wrong doings and perhaps even came to believe that they owed their success to such ‘smart business practices'. This is a classic case of mistaking success as ‘because of' rather than ‘in spite of' certain actions.Kant's discussions with Alex presents a whole range of issues. Alex gave psychological explanations — "value system takes precedence over personality", "tendencies in personality that tend to be active or dormant" and "even honesty is a tendency latent", and the like. Understandably, Naren is not satisfied.Discussions with Kaustubh, Kant's HR head does not help him either. Kaustubh goes about counting many reasons with the objective of helping Kant understand that the problem is "temptation of consideration".Kant is alone — his colleagues do not seem to share his high standards of morality and ethics. It is a crisis of judgement for him. Such situations are not unusual for leaders in their pursuit of progress and success for themselves and their organisations, particularly in an environment of roller-coaster ride and cut-throat competition. Corporations that hire high-profile officials retiring from government service do so to use their rich experience and ‘competence' and, even more importantly, ‘rich connections', so that the machinery could be influenced in the desired direction. Noel Tichy and Warren Bennis, both internationally acclaimed leadership gurus, wrote a must-read ‘bible' on leadership for managers and titled that book Judgement. They drive home the point that leaders' lives are full of judgements: about strategy, people and crises. They make a powerful observation and reinforce the same throughout their book saying, "with judgement, little else matters; without it, nothing else matters!" Kant is faced with a crisis of judgement; but then that is also an opportunity to redefine the culture of the organisation and emerge a great role-model corporate citizen. Like McNerney, how Kant handles the challenges, will determine the future course of success for the company.Look at the landscape of many large IT companies whose claim to fame includes being ethical and you will recognise:They cook up the attrition data presented to the analysts to paint a picture of stability;They lay-off thousands during downturns, but claim to be getting rid of non-performers;They tweak and fudge the résumés of employees to present to the clients to show that they have plenty of skills.Where do you place them on the yardstick for integrity? The argument is often the same: everybody does it, so what is the big deal? Or, does success forgive all these behaviour and provides legitimacy?Kant may be alone, but leaders do not get agitated by this loneliness. As much as there are Satyams, Andersons, Enrons and Global-Crossings, there are several others who refuse to profit from grey areas but draw the lines clearly and make ethical behaviour non-negotiable. Kant must do what McNerney did: own up, clean up, get the right people on board, and not play by the Jekylls who Hyde by night! Leadership is neither easy nor for the weak-hearted.C. Mahalingam is executive vice-president and chief people officer with Symphony Services Corporation(This story was published in Businessworld Issue Dated 11-04-2011)
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Gautama Dev tapped his forehead as if reaffirming what he had written to Amit Dave, head of Relationship Banking at Kiminey Bank (KB): "When I look back... it seems there was a deliberate move to keep this info away from me...." Now, Gautama simply knew those words held the truth behind what was going on. Gautama was a 10-year-old NRI customer of KB, which also looked after his wealth and investments. The Bank sent him monthly statements at both cost and market value, a practice it kept up until he invested in Instep. Two years ago, KB had suggested Gautama invest in Instep Insurance's pension-oriented investment product. KB said it was better than mutual funds (MF) as the cost was 50 per cent less (see ‘To Market, To Market, To Buy A Fat Pig'). After Rs 16 lakh and 16 months, Gautama found the net worth of his investment was a negative 3 per cent! And, he accidentally discovered that all this was owing to an upfront 7.5 per cent charge on his premiums of Year 1! And when he began to question this, his bank of 10 years adopted a clipped, dispassionate attitude and told him to take it up with Instep. So, from being wealth managers who operated on his behalf, KB — especially its Nambiars, Naiks and Suris — were now choosing to play lower division clerks. KB, which had hired these men and women, was effectively backing off its fiduciary role, and protecting itself. Gautama had seen this coming. He knew what it took for an organisation to be ethical; to admit error when it had been committed. As KB dodged, backed off, cold and unsupportive, he wrote to Dave about how Instep's insurance-linked pension had consumed more of his money as investment but produced negative returns. Then "Instep was mis-sold to me on pretext that the annual cost was very low at approximately 1 per cent, versus 2 per cent for MFs, and no mention of the upfront charge of 7.5 per cent made transparent. None of the 24-25 emails KB has written to me about the Instep investment, refers to the 7.5 per cent charge! I do not believe this meets KB International's standards of ethical conduct in business. "I request KB to use its relationship with Instep and have the policies terminated without any penalty, which is a reasonable enough request. This means I will get back the amount invested over two years and Instep would have had free use of my money over this period. This opportunity loss is acceptable to me. However, I should not be forced to continue an investment where facts, material to the investment decision, were not disclosed to me." break-page-break Twenty seven days passed and the head of relationship banking of KB, a large MNC bank, had not replied. Gautama wrote again: "I am sorry to be taking your time, Mr Dave, but it is a month since I wrote to you. This long delay is not making me feel valued as a customer." Dave replied with an auto responder type of script... "Appreciate we are only referral agents; Instep's product features are theirs, approved by Irda...." KB chose to ignore Gautama's mails. Gautama, who had managed a Rs 15,000-crore business for eight years of his 26-year career, had done so successfully only owing to his ethical conduct and decorum — something he was both known and feared for. He was now surprised. Referral agents? Then what happened to "we have a very special relationship"? What happened to "we have advised all our HNIs to move out of MF to Instep"? That was not how a referral agent behaved! Gautama finally wrote what he had refrained from till now: "I would like you to think about this, Mr Dave: as a leader of a global bank, the values that guide your decisions in a crunch situation, are what shape the values and culture that people down the line will follow. [I run an organisation as well, and talk from experience.] KB was my trusted wealth advisor for many years. My question to you is: Did it meet the bank's stated customer policies, to advise me to shift investments from MFs to this Instep product knowing that the 7.5 per cent upfront charge would mean an additional cost to me of 2.5 per cent per annum over a three-year period? "To then fail to advise me of this charge, but instead emphasise that the annual cost would be 1 per cent lower than what MFs charged, does that meet the ethical standards of service of KB? "Lastly, as a long standing customer who was mis-sold a product, once I have escalated this to your level, should you not, as my banker, be standing shoulder to shoulder with me in taking this up with Instep? "The banking business is about trust and relationship, both when you deal with your customers and when you deal with your ‘suppliers'. Why then is it not possible to resolve this issue in a spirit of partnership ensuring fairness to me and to Instep?" Gautama was leaving for a 10-day lecture trip to the US. Three of the Indian managers in the Gibbley Group — Advait Kundra, Shailesh Karnik and Tara Swamy — who had been in close touch with Gautama, came to bid him farewell. They sat and chatted even as he was running around getting his papers together. "The newest is that now Instep wants to charge a penalty of 25 per cent of premiums paid, if I want to discontinue the policy," said Gautama. "This is misuse of a monopolistic position vis-a- vis a small investor; and there is no commercial justification for such a high penalty especially after 16 months of free use of my money!" Advait: Firstly, there is no commercial rationalisation for a pension plan to have an upfront charge of 7.5 per cent. Secondly, you state it bold and clear, not hide it in small print.They discussed as Gautama remained busy. Shailesh: See, the very fact that the bank failed to reveal the MV of the investment for 16 months tells one story. But I am stunned they would do this to an HNI! I thought they did it to paupers like me — give a loan, then send the debt collectors snarling after me! Advait: Every bank that is managing portfolios is working on luck! They may have a specified menu of funds in which they will claim they invest... but, in fact, the promiscuity is unimaginable. Just watch how the market has been moving — 14000 points one day, up to 21k, then down to 18k. In this scenario, the fellow has your 3-4 crores. They hang on to hope, living from one week to the next. Everybody in the industry is breaking Sebi rules and there is no one to find out. That is how fluid the market is. Tara: But to risk this with an HNI... Advait: I would say the HNI is the easiest target! Just think. Who is your HNI? Senior directors, MDs, CEOs, senior VPs. These are people who groom people, systems and situations to be dependable and who are prone to work with the bigger picture, leaving verification, cross checking, etc., to their subordinates. Isn't he a sitting duck? They sign papers with faith in people who work with them. So here is a bank that has built the HNI's faith through its brand and superior English. It comes and says "I will take care of your investments," opens five pages of a 40-page document and says, "Sign here, here, here and here. I will give you back what you value most: time!" And the HNI signs! Tara: I think the warning signal was flashing bright when relationship manager (RM) Atulya Ambi was moved out. An RM is a psychological ploy, to create for you a sense of care, attention, etc. It is cheaper and more revenue effective than the customer changing bank! So, that is achieved by giving you a sense of ‘You didn't like that RM? Okay, I kicked him out. Let me bring you our best....' as if selling you good wine. Advait: Amazing! See how this industry has shaped its strategy with the behaviours that come with it! The HNI himself is used to excusing people, used to small inefficiencies and thinks "organisations are mammoths, finally run by people and people make mistakes, it is part of life". Because this is exactly what happens in his own organisation, and that is how he manages teams — by forgiving, shepherding and indulging now and then. Tara: A large part of this is behavioural; living overseas makes you sad and grateful every time you deal with India from here. This is a major bonding situation that NRIs fall for. They probably look to bond with their bankers, "Yaar, look after my money." And when your banker tells you, "Sir, just leave it to me...", you heave a sigh of relief. We are such suckers for that kind of talk, and service companies, especially banks, leverage on that emotion! Advait: Exactly. The HNI is looking for comfort and convenience with no investment of time, because that is one thing he does not have. (They are the last ones who get to use their money, incidentally!) He asks for loyalty, and believes that the person is loyal and trustworthy. Why? Difficult to give one reason, as this is an emerging market of Arrow Shirts and rimless glasses and Oxford English to whom you hand over your wealth. Maybe you see yourself in his demeanour — educated, senior management — and you feel this guy can be trusted. Actually the idea of being cheated does not even occur. In two meetings you gauge that he is a sharp shooter. But ethics is never in doubt! So you drive him away genially and say, "jao yaar, don't ask me to read these 40 pages, I have other things to do". Why? So many options are thrown at you, and if you are a non-finance guy, you are demolished. Cost? MV? Yield up to maturity with current realisations? That's not even English! One sheet of paper can show you several percentages pulled out with several formulas! These may not be impossible to decode, but it means investing time, you see! When you see money come into the bank regularly, the regularity and not the composition of the amount lulls you into a sense of well being. You do a quick corner of the head calculation and it makes sense... But do you have time? This is the malady of the post-liberalisation wealthy corporate man! The market for portfolio managers has grown faster than his investments and, just like detergents these days have power boosters, are oxy-activated, biological, sensory, and what not, the investment business has also thrown up nuances to its products, which we frankly don't care about because the details are more forbidding than the process! Do you care that your toothpaste has gobbledygook and hibbledylook? Who cares? Need toothpaste at 7 am, anything in tube with a flavour of mint will do. This is broadly the definition of the corporate investor who uses a banker to invest. He is in deep trouble... because the banker knows much more than what the customer does and the banker does a lot more with his money than the customer knows! Face it! Gautama (stopping by while buzzing about): You guys still discussing me? (answering various questions at the same time)... Sorry? Oh well, actually I caught on much sooner. I noticed in the first statement itself that MV was not showing. I said to myself, she will do it, she is efficient. I didn't want to remind unnecessarily... I thought the system was taking time to respond to the new investment added... Shailesh: Okay tell me, if the insurance company is telling you that the 7.5 per cent was tucked away inside, you don't have a case, na? Gautama: Based on my limited reading of the Law of Contract, no. I was supposed to have looked at the 40 pages and unearthed the 7.5. But my view is that I had a wealth manager and I trusted him to look after my decisions. That's what I expected this relationship would do: poke my decisions, question my choices, point out the details, caution me... I use a wealth manager not because I have wealth but because I don't have much time! break-page-break For the Law of Contract to be invoked, a consideration for services is crucial. Banks will not document a wealth advisory relationship, and naturally will levy no fee. Hence, there is deemed to be no contract, as there is no direct consideration! Tara: Yes, ‘the banker does a lot more with his money than the customer knows!' Advait: Everybody is in cahoots! I invested in some MF in September. When I looked at my statement now, I was expecting 7 per cent but the yield was 5 per cent. Duniya makes money on MFs, but not me! Yeh sabko maama banaate hain! This is standard operating procedure. People don't talk about it because you don't want to look like a fool in front of others. Tara: But MFs advertise that you can earn crazy amounts... AK: Grammatical error I would say. The MF earns the money. Their definitions are always so nebulous. A 7.5 per cent upfront charge... 16 per cent gross margins — what is gross margin? So who knows what is being put on a piece of paper is gross margins, net margins, what are the loadings, net of overheads? You expect banks and insurance companies to tell you there is an entry cost, but they don't. Colleges and schools tell you fees is Rs 5,000 a month; until you discover there is a Rs 25,000 registration fee! Most nebulous and meaningless! Everybody is playing with words! Gautama: Okay, enough bitter talk. The core issue is this: when I hand over my money to a bank that offers to invest it for me... what happens to the trust? To the fiduciary relationship? To the "don't worry, sir, you are in safe hands"?This trust cannot be documented or proven in a court of law, because that is what goodwill is all about. Trust is the underlying substratum on which the banker-customer relationship stands. But the moment you disagree with him or he errs, he will blur away and become scarce. How can trust be based on opportunity? Advait: I have a theory called The Fig Leaf of Rationalisation. In India today, 75 per cent of the software is pirated. Try telling the guy who is using an underground version of Windows that he is thieving. This behaviour is subscribed to by the team first, then the department and then the organisation. This rationalisation is called ‘common practice'. Therefore, ‘he is an HNI, it is his job to take care of his investment'. Shailesh: Every industry has these rationalisations. In Teffer India, we had zero defect factories and the defect rates were factored into our bonuses. For the factory manager, the key parameter was cost per tonne. So when faced with a quality problem, his dilemma straddled release or reprocess the batch? My bonus or company's short-term gain or loss? Release the minor defects for sale or reject the lot? Both are tough choices that impact conscience and coffers. Advait: Fabulous! So let me add, as the bonus component or ‘opportunity to earn' gets bigger, the brain conjures up more rationales making choice difficult. Now, if a majority in the industry is making similar choices, that becomes a way of doing business, loosely called industry practice. Customer wealth improvement may not, therefore, be an overpowering goal.Shailesh: All this is symptomatic of the fact that if you don't balance off the variable component of a manager's salary with the fixed, then such things will happen. Advait: Very true... Intelligence should definitely be rewarded, but not so much that it dulls an individual's ethical quotient. Shailesh: And a consideration for these rationalisations, powers it. So be it a murder for fuel, or a 2G scam, or land usurped or a garland of currency notes, the impetus is money.I will sell what sells, as long as the consideration is money. If sex sells, I will sell it saying India should not be a prude! It is a question of rationalising it, and when your rationalisation gets stronger, you get more voices behind you as the money riding it gets bigger and bigger. And presently, you believe in your stupidity. Tara: See, the dividing line between a greed-led rationalisation and wilful fraud is very thin. The lure of bonuses is definitely the silent persuader. Then it comes down to your personal ethics quotient, and how hard you have trained your mind to stay on the line. I know there are audit practices and standards such as Companies (Auditor's Report) Order (CARO) for every operation in a manufacturing process, but are the sections pertaining to banks and service companies as sharp? I doubt. If a small coterie was to operate to further its personal interests or be target-driven but contrary to accepted procedures (not being rationalisations) — like the Citi case — are there control objectives woven into the system that will beep weakness on encountering them? Seems not, considering that the fraudster got away with his work way past a financial year and CARO did not ‘find' him! Kundra: Good point! Then again, banking customer service is qualitative and even CARO can only opine on fairness, not on accuracy. Shailesh: I feel there has to be an internal audit procedure for bankers as individuals because they are the housing in which the entire service resides — the thought, the creative, and the intention from where the strategy is manufactured. Hence, their functioning has to be auditable. Therefore, a banker as a human has to be under continuous audit! Gautama: As Alan Simpson says, "If you have integrity, nothing else matters. If you don't have integrity, nothing else matters!"Classroom DiscussionA designation and salary is not for our academic might but in the consciousness that we deserve them. casestudymeera(at)gmail(dot)com (This story was published in Businessworld Issue Dated 14-03-2011)
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A lot of people including me would be able to empathise with Gautama who feels wronged by KB. Under pressure to meet sales targets, often wealth managers try to sell products and services to their trusting clients without disclosing the underlying risks. Wealth managers rarely explain what is in the documents that they want their clients to sign before actually selling any new product or service. Clients, on their part, rarely ask their wealth managers to explain what is in the documents they are asked to sign. As documents often run into several pages of fine print and are full of legalese, it is almost impossible for a busy client like Gautama to read them and understand what they are signing. The general legal principle is "caveat emptor", which means "buyer beware". So, the client cannot later on say that he/she did not understand what he/she was buying. Moreover, the documents signed by the client usually contains a statement that he/she has read and understood the contents of the documents and that the bank has provided all the necessary explanations sought by him/her. Notwithstanding such waivers obtained by the bank, the client should be able to take legal action against the bank if he/she feels that the risks embedded in the product he/she bought were not explained by the bank. But the reality is no individual client like Gautama has the time or the patience to pursue such action. I guess from the bank's point of view, according to the law of averages, only one in a thousand clients may resort to such action. So, it is not such a big risk for them, given the risk-versus-reward trade off. Even in countries such as the US, where class-action suits are common in which hundreds and thousands of aggrieved parties take legal action against the bank and where punitive damages running to hundreds of millions of dollars are awarded, instances of banks selling risky products to their clients without explaining all the underlying risks are not unknown. In this fast-changing world, where every day some bank is coming up with a new product with new features promising more return or more safety, often using derivatives and synthetics, it is also difficult for the bank's wealth managers to fully understand the risks before they start selling the products. Often unintentionally and more out of sheer ignorance, wealth managers fail to explain the risks to their clients. While I will not defend KB and its officers for what they did to Gautama, clients like Gautama have to realise that there are no free lunches in this world. When they are offered an investment product, which is claimed to yield a higher return than a plain vanilla mutual fund, they have to be on their guard and find out how and why. Generally speaking, higher yields cannot be obtained without higher risk. Most large banks have a structured products group that keeps churning out products using derivatives and other instruments. Obviously, selling structured products is more profitable for the banks than selling plain vanilla products. So, wealth managers are asked to sell these structured products to their clients to whom the attractive features of the products are highlighted but not the underlying extra risks. Derivatives were meant to help large corporations to hedge risks underlying their businesses. But they are being now indiscriminately used to structure products touting higher returns to unsuspecting retail clients. A possible explanation as to why KB's wealth manager did not alert Gautama to the 7.5 per cent upfront charge by Instep is the fact that KB was the main beneficiary of the amount taken out of the first premium. The insurance company, in order to induce distributors like KB to sell more of their policies, could have offered an attractive commission on sales that naturally comes out of the first premium paid by the client.Finally, there is no question whether or not KB betrayed Gautama's trust and confidence in it and its wealth managers. Also, I don't believe that KB intended to cause such loss to one of its longstanding clients because it is not in their interest. Obviously, KB's overemphasis on its sales culture, and their wealth managers not taking the time to understand the real risks for their client in their anxiety to reach their sales targets, are to be blamed. I wonder if hard selling is at all appropriate for banks, which are supposed to be guardians of people's savings. Secondly, when they realise that a mistake has been made, they should immediately acknowledge their mistake and try to make amends. In this case, KB could have easily admitted their mistake and made restoration to Gautama, which would have further reinforced his trust and confidence in his bank. It is probably the peculiar Indian psyche that prevents wrong doers from admitting their mistake and making amends. They don't realise that while for the time being they can escape retribution, in the long run such behaviour will come back to haunt them. K. Balasubramanian is former executive director of American Express Bank (This story was published in Businessworld Issue Dated 14-03-2011)
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I do not understand law, finance, investments or audits. I do, however, understand relationships and trust. Mr Gautama you have been jilted in a relationship by an organisation that had professed to protect you. And you are being blamed for it. Please end your confusion and ensure that these people do not hurt anyone else. Here is why I say this. There are four dimensions to a relationship. To be in a valued relationship we have to care, we have to respect, we have to behave responsibly, and we have to work with the knowledge of the person we have a relationship with. Such a relationship, where you feel cared for, you feel respected, you feel that the other person is likely to behave with responsibility towards you, you feel that the person has the knowledge of your strengths and limitations and helps you acknowledge your strengths. In your relationship with Kiminey Bank, the bank pretended to show care and pretended to respect you. The bank used the knowledge about you to benefit itself. It did not behave responsibly towards you as it continued to blame you for your decisions, instead of owning responsibility for having guided you in a deceitful manner. In your relationship with Instep, the company again used the knowledge of you to its own benefit, and it did not respect you as it hid the knowledge about its charges in the fine print. It did not behave responsibly as it chose not to respond to your anxieties, and it used knowledge about you to its own benefit. So, both these organisations have wilfully treated you in a manner that betrays a common understanding of trust. If you as an adult encouraged a child to jump from a height and then were not there to catch her when she did jump, would you accept the responsibility that you contributed to the hurt or would you point to the fact that you had pointed out she may get hurt as fine print? It may seem that you used your will and preference, and you made an unwise decision so it is your responsibility. However, the reality is that you were not given the information in the form that you would make sense of and you did not make an informed decision.The behaviour of both the bank and the insurance company has been a conspiracy to exploit. If any of your friends or family had done this to you, believe it or not, you would not have been on talking terms with them for the next few years. You would have felt abused and betrayed. The sense of betrayal would make you feel violated. But your bank did this to a high-net worth individual (HNI), so it is called ‘reasonable practice' of business. It will continue to be so, as in providing such services, the service provider forgets to ask some pertinent questions. Let us together ask those questions. Question 1. What was the basis of the relationship on which the service was being provided? Trust, is the obvious answer to this. Trust built over years of not harming and fulfilling promises, smiling and being nice. Now, the supplementary question is that can this trust be then suddenly monetised to benefit another commercial relationship? Question 2. What was the service being provided by the bank to the HNI? Was the service that of a referrer? Or was the service of a consultant that helps the HNI to make an informed decision? The bank seems to be working as a surrogate solicitor under the garb of the consultant. It cannot be both. Such conflict of interests should disqualify the bank from the role of being the guide and coach to its customers. Question 3. Whose agent was the bank? In this relationship, was the bank the agent of Instep or the HNI? The bank, again, was trying to have two relationships at the same time. While it promised fidelity to Gautama through its use of trust, it promised ‘a catch' to the insurance company. It should not have been doing both. It should have been commercially benefiting from one of the two relationships, and it had to be transparent to both about its relationship with the other. Question 4. What are the redress mechanisms for people who are affected by this cheating? There are only a few solutions. The first is to undo the impact by making the bank and the insurance company pay the customer his reasonable loss. The second solution is to audit all HNI relationships at the said bank and see who else is being sold the broad dream and the fine print. The third solution is to stop the banks from soliciting on the behalf of insurance firms. The vacuum of values extends beyond all transactions and across the geographical boundaries. So the long-term solution for challenging the cynicism is reintroducing a reflection about what we do and how we do it in our everyday practice. Achal Bhagat is senior consultant psychiatrist and psychotherapist at Apollo Hospital Delhi. He is also the founder director of Saarthak, a not-for-profit organisation for mental health (This story was published in Businessworld Issue Dated 14-03-2011)
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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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