 "Kavil Ramachandran: Gridlock leaders get trapped into")
The knot is getting tighter with every new step adding to the existing complications. The unanimous decision of the independent directors of the Tata controlled Indian Hotels to reaffirm confidence in Chairman Cyrus Mistry has further weakened Ratan Tata’s position in the current imbroglio. Reports on the possibility of the scene replayed at the forthcoming board meetings of other major Tata group companies are a sign of the worsening situation.
Fundamentally, gridlocks are manifestations of typical traffic jams Indian cities are familiar with. Disregard for accepted and tradition driven principles of governance and practice of professionalism will encourage self-centred drivers to cut corners and move ahead. Growing frustration and the tendency to break rules result in every driver trying to push forward with one’s own agenda. Sooner than later, the traffic comes to a complete halt. There are no winners in such gridlocks as at the end of day every individual, the economy and the society suffers.
Why do leaders create gridlocks?
There are several reasons for outgoing leaders to involuntarily create and get trapped in a gridlock. Basically, they are leaders who have built their empires over a period of time through a number of intelligent and political moves. Over the years, they start believing that they are indispensable for the empire they have been ruling. Surrounded by loyal people, they continue to be the centre of attention. They want their successors to be their own alter ego and drive on the same road, the same way. Leaders of some of India’s diversified, large organisations dig their own grave yard in the process.
Such leaders have so much of confidence in themselves that they believe in their might to drive through any traffic jam. For them, the principle is “my way, the highway”! Their larger than life size image and ego, camouflaged by their rededication to the traditions and values of the institution they are managing, do not allow them to see any resistance or admit mistakes.
Insecurity is yet another challenge faced by such gridlock makers. They are not sure of the capabilities of their successor they themselves had chosen. They are also not sure of their own ability to take a new path. They fail to “redefine” their portfolio of activities and move on. They are like a hesitant trapeze artist who holds on to the ladder he has been standing for fear of not able to jump on to a new one. In some other cases, outgoing leaders who are aware of some of the mess of their own making would be worried about the successor telling the whole world outside what an incompetent leader he succeeded. Question marks on the judgement of group chairman Ratan Tata and the way he drove his passion through the group companies fall into this category.
The nature and extent of opposition to the moves of the Tata Trusts to get Mistry removed “somehow” from group companies is reflective of the bottled up frustrations of some of the key stake holders to hit back. Outgoing leaders do not always expect such forces to gather momentum quickly and hit back.
Where do the basic strategy lessons disappear?
Any student of business strategy knows about “scenario planning” wherein one creates multiple emerging scenarios and evaluate them for their possible outcome based on clear assumptions. The Tata loyalists seem to have miserably failed to anticipate opposition to their moves from the group companies where they don’t even hold majority control. The misplaced assumption that Ratan Tata continue to wield the power he used to have might have led them to finalise their recent moves. Lessons in strategy also warn against ad hoc and haphazard moves driven by passion.
One should always draw lessons from the tragic story of Abhimanyu, Arjun’s son in the Mahabharatha. It is rather easy to get trapped because of your over confidence to avenge the enemies. Getting out of a chakra vyuham is not always easy.
The gridlock that Ratan Tata has made is one such. It should be a lesson for the other successful and long standing leaders to draw lessons from, lest they might get themselves trapped in another gridlock.
(The concluding part will be published tomorrow.)
The writer is professor and executive director of the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
