The Hindu Business Line : Managers... now & then

I used to work for a company, which was taken over by an MNC in the 1980s. At the first formal meeting, the English member of the MNC board greeted me and said, "Hello there and welcome. I see both of us will draw pension from the same company." I was pushing 50 then and he had a year to go before retirement. But what he said did summarise the attitude of most professional managers of that period. Basically you worked for a company long enough to retire from there; loyalty was prized and the safety net of retirement benefits was motivation enough.

Liberalisation and de-regulation shook the foundations of many market leaders; at the same time there were new opportunities. The 1990s registered some major shifts in attitude towards loyalty. Changing jobs is a healthy thing today and the width of experience gained from there has its own value-addition. The essence of today's attitude is best clarified by what the continuing focus of the manager is — `career' or `profession'. Staying on top of a profession requires not only new learning, but also going to those companies that are at the cutting edge. For today's manager, the sentiment is almost like: `It is not that I loved Caesar less but I loved Rome more'. Loyalty is more broadband today; it favours the profession than the company.

Information-sharing

In those days, turf was very important and managers went out of the way to protect it. The system of incentives reinforced this attitude, as targets were set individually. If you wanted to achieve your target, you had to be extremely competitive. While this did not make the managers overly aggressive, it did bring into focus the importance of information as a source of power. It was never easy for managers from one functional area to get information from another. I recall the days when I used to be a brand manager in a small consumer products company. By definition, the job of a brand manager is one of orchestration across the company. In the absence of free flow of information, I had to use the leverage of my boss to get things right, as he was also the head of the company.

Today, however, it is recognised that knowledge-flow across the company is crucial. Networking has become the order of the day. Teamwork is recognised as critical and in many cases incentive schemes have become broad-based. For instance, in the company I work for I have introduced a combination of both individual-target based incentives as well as a broad-based group incentive. Of course, the penetration of information technology has helped information flow much easier than it was during the 1980s.

India-centric or global-centric

In those days, managers generally paid very little attention to the global economic changes. The focus was more India-specific for drawing up plans and evaluating strategies. This was quite natural because liberalisation had not set in then and the regimentation of the economy ensured that people had to constantly look up to the government. Policy-makers were treated as Gods and the thinking of managers was heavily bottom-line focused. In an era of contained competition, market-share emphasis was less, while the need to keep profits high was seen as more important. The capital market was just evolving and retained earnings were the major source for expansion.

A lot has changed with the gradual opening up of the economy. Freedom to import is a new source of cost-effectiveness, but it also means keeping a wary eye on the exchange rate. The links with the global economy have to be understood. Disruptions in supply have to be factored in considering the various political changes that have taken place (for example, the collapse of communism) and the borderless threat of terrorism. The thinking today is clearly focused on sustaining competitive advantage. This, in turn, has spread a lot more dependence on specialists in various fields rather than generalists who used to rule the roost earlier.

Role models

Today's leaders in business, who act as role models, are more likely to be specialists in their field, while also leading the company. The role model for managers in the previous era was more of a generalist with good conceptual skills cutting across different functional areas. Although not a specialist, his span of knowledge was very wide. I get the feeling that yesterday's leaders had less to talk but a lot to say on a wide range of subjects, whereas today's gadget-conscious, highly mobile leaders seem to have more to talk but less to say, except on their own specialty. Of course, the world of business is a lot more complex today and the extensive use of consultants is, to a great extent, proof that the age of the generalist is long over.

Collateral arrogance

The manager of yesterday was definitely well protected from the prying eyes of the outside world. There wasn't much by way of business press. Shareholder activism was in its infancy; legislation had not yet changed much to warrant companies to talk extensively about expected results every quarter or give out future plans. Stock market expectations were muted and modest. The comfort of the status quo could, under certain conditions, induce considerable complacency. As a result, managers in high positions, especially from MNCs, did exhibit some collateral arrogance, which was on display very often at company AGMs and management seminars.

Much of this has changed now. Business reporting is multi-media and some exclusive TV channels make it interactive too! The Internet provides a fantastic barometer of many aspects of a company's business. Corporate governance with its extended stakeholder focus is the order of the day. Public scrutiny has increased enormously. Today's managers are definitely media savvy and better grounded in public relations than ever before, but at the same time one cannot ignore the tendency to be more focused on the short term. If quarterly results are more important (as expected by the stock market and the media), the manager of today could be sacrificing long-term gains. This is an aspect of corporate governance very much debated today, but what is important is to recognise the fact that today's managers have to come to grips with this problem, especially in the context of long service not being a key issue any longer.

Self-employment

With the wealth of opportunities created by outsourcing and the phenomenal growth of the services sector, the demand for professional managers from various disciplines has shot up. Equally, today's managers are not averse to branching off on their own to take advantage of this feature in the market. It does involve some risk and to some extent, today's managers are less averse to taking risks than their colleagues 20 years ago. But this also reinforces the first point — drying up of the concept of a career in a company.

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