The Hindu Business Line : Selecting the right leader

I vividly remember scenes from the first circus performance that I saw many, many years ago. There were three clowns who did things that made us laugh hysterically. I did not then know the word slapstick, but I enjoyed their antics hugely. Their funniest act was to drive a ramshackle car. All three would struggle to be at the wheel and in the ensuing melee, the car would careen all over and also come apart, bit by bit.

I was reminded of this scene after attending a meeting in a young company where the four founders, who were also the most senior managers, were jostling for control of the steering wheel. The company had become very successful and an IPO beckoned. All that had made them such a formidable team, seemed destined to vanish in a puff of smoke.

This is a common enough scenario in many young companies that are on a fast forward trajectory. This is also the time when real achievements can hide serious fault lines that are developing in the company. At this point, it is important that the senior managers who control the destiny of the company discuss and agree on who should be at the wheel. But this is easier said than done. Very often, egos stand in the way of doing the right thing by the company.

The task of the management team is to, at all times, provide the vision and get the best set of people to translate that vision to a successful practical reality. It is possible that many in the senior management team deserve to be part of the execution team as well. The trick is in choosing a leader who will lead the team and who will also be comfortable in being an integral part of it. The leader has to be someone who contributes to the team’s success in his own right. The Westminster model of the cabinet system of government, which India has emulated, possibly best symbolises this. The Prime Minister is the first amongst equals in the cabinet.

Focus on the big picture

It will help immensely if the senior managers are able to focus on the big picture and define their roles suitably. What matters is the onward march of the firm and fulfilment of the vision; not the progressive need for a self-aggrandising ego build-up of individuals. A healthy ego is critical for survival and success, but cannot become the motive force for doing things. Here’s where, if the big picture is firmly kept in mind, things become easier. It then becomes evident that what is most important is the success of the firm; everything else is subservient to that goal. What becomes clear is that there is a universe of stakeholders who depend on the management team to make their dreams come true. This will, in turn, make the system a true meritocracy where leaders and the senior team will continuously justify their position in terms of how they can deliver superlative performance; how well they can live the vision.

In mature companies, the selection of the leader is likely to be a more orderly process. In really great companies, succession plans are a crucial part of the long-term planning process. This applies even to family-owned companies, which are still a dominant force not just in India, but even in mature economies such as the US. What matters is the ability to lead and not genetics. It is, however, important to qualify this statement to say that genetics should not become a constraint and barrier if the individual is qualified for the leadership role. In young companies, it becomes imperative to apply these practices from early days, so that the right leadership DNA is introduced. Let no one say that the company has a bunch of clowns at the wheel!

(The writer is advisor to 3i Infotech, Blue River Capital and IDFC Pvt Equity.)

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