Arvind Singhal: Managing management

MARKETMIND

In the last 13 years, I have had the privilege of working with literally hundreds of chief executives and interacting with thousands of senior managers spanning the entire gamut of consumer product businesses in India.

It has been an extremely fascinating and professionally rewarding experience to be able to observe at very close quarters how the management leadership has been functioning in (private sector) India.

The diversity is indeed extraordinary, ranging from third- or even fourth-generation scions of illustrious business families, to loyal "retainers" of some of the traditional business families who have made it to the top by sheer loyalty to the family or the group, to the so-named professional managers who have risen by dint of steady performance, and finally to the "new age" business manager leaders who have been fortunate to have started their careers in the more liberal business environment of the 1990s with the polish derived from high-quality public schooling, strong B-school credentials, and the benefit of the arrival of highly energetic head-hunters and placement consultants.

The management style, not surprisingly, is also as diverse and manifests itself in every possible way in the design and layout of their offices, their internal and external communication styles, dress codes, language and accents, and, of course, the decision taking and managing process.

Is there a clear profile of an ideal CEO/top management team in the context of where the Indian economy is today and where it is likely to be in the coming decade?

In my view, this ideal CEO/top management group should have top-calibre intellect, international exposure, strong consumer orientation, marketing and brand management savvy, analytical strength, excellent communication skills, quick decision-taking capability, and, above all, an indefatigable orientation for getting results.

As is to be expected, it is rare to find all of these strengths in any one individual and hence it is more practical to assemble a group of capable individuals who can each bring in some of these skills to complement each other.

Unfortunately, it is rather rare to find organisations having this balance in their management cadre and hence it is no surprise that many of the otherwise promising businesses in India are facing some challenge in growing (and maintaining profitability) in today's environment.

Many of the loyal retainers heading the (family-owned groups) businesses or having professional manager CEOs who started their careers in early 1970s are now finding the pace of change too much for their comfort.

Many of them, accordingly, are unable to take strategic decisions and are barely managing to maintain their companies in some kind of a holding pattern at best.

At the other end of the spectrum, top ranked B-school graduates of the late 80s and early 90s vintage have the right jargon and some exposure to modern management techniques, and are more decisive, but usually lack the wisdom of experience to take the right decisions.

I also graduated with an MBA from a highly acclaimed US B-school in the early 80s and still well remember the curriculum. I have no hesitation is mentioning that a lot of that learning is now probably of little relevance.

Our business world, today, is incredibly different from what it was 15-20 years ago, and will be even more different in the next 10. Globalisation, outsourcing, global supply chain development and management, managing differentiation and innovation, dealing with intangibles such as consumer experience, busting of value (and brands) through the sheer scale of discount retailing, the Internet, which gives an incredible power to consumers as well as competitors, the rise of China, and the impact of Chinese-style economic management, etc. are just some of the very important developments of the last decade.

Very obviously, most B-school curriculums have not been able to keep pace with this change and hence could be producing managers trained on obsolete paradigms and management theory.

Many of these young managers (in their 30s), therefore, do not have the wisdom of experience to be able to recalibrate what they learnt in the B-school and then adapt to the new business environment.

In my experience, while the first breed of managers (older generation, no formal business education) have an almost natural antipathy to manage through analytical rigour and the discipline of numbers, the latter breed (relatively young B-school Turks) are mostly driven by numbers and theory rather than a combination of quantitative and qualitative analysis and a business intuition.

What, then, is the solution? In my view, there is no doubt that all companies""whether for profit or not for profit""require professionally trained, high-intellect managers.

These managers must have very strong analytical skills and an ability to understand and apply quantitative information. Thereafter, companies must create some "new age" line functions that deal with issues such as innovation, product design and development, understanding and tracking of consumer behaviour, delivering the promised experience to the consumer, creating and managing global supply chains, developing and managing global strategic alliances and relationships, human resource development and management in the context of knowledge economy, and others.

Only after these young professionals have gained practical experience in one or more of these new line functions (not taught in the B-schools, by and large) should they be allowed to lead or participate in the leadership of large companies and businesses.

Till a large cadre of such professionals is developed, companies should rely on a judicious combination of the wisdom of the old, and the promise of the young, supplementing the need gaps by bringing""on statutory boards or as advisors""outsiders who have already achieved excellence in some of these new desirable disciplines and are now willing to share it with others.

arvind@ksa-technopak.com