Managing in tough times

On the face of it, there is little in common between NR Narayana Murthy and Narendra Modi, apart from, perhaps, a shared taste for Spartan living. But a closer look reveals many more things that both have in common.

The obvious similarity, of course, is success. Murthy is arguably India’s most successful IT entrepreneur. Modi is unarguably India’s most successful political entrepreneur.

They are both strong and dominant leaders within their spheres of activity — Modi within the BJP and now, the Government, Murthy in Infosys. Both are also outstanding salesmen.

Modi sold the idea of his brand of development to voters with spectacular success, while Murthy was largely responsible for selling not just Infosys, but Indian IT capability itself, when both India and Indian IT were unknown quantities in the global market.

But perhaps the most striking parallel between the two is the similar nature of the challenge they face — delivering on expectations. So much so that both Murthy and Modi face the very real danger of falling victim to their own image.

They have been so successful in the past and the image of an inherent ability to succeed has been so well built up in their current stints, that they may not be given any room for manoeuvre. For both, failure is simply not an option.

There is yet another similarity. Both find themselves where they are today — Murthy back at the helm in Infosys and Modi ensconced in Race Course Road — because of a failure of leadership.

But there is an important difference. While Murthy was forced to return because of the failure of the internal leadership which took over from him, Modi secured the throne because of a failure of leadership amongst his principal competitor, the Congress.

There is a key lesson to be learnt here — accountability. It is easy to see now, especially with the benefit of hindsight, how a lack of accountability had led to crisis, both for Infy and the Congress.

As leadership guru Michael Hyatt points out, “Everyone wants to be a leader. However, few are prepared to accept the accountability that goes with it. But you can’t have one without the other. They are two sides of the same coin.”

Almost half a century before Hyatt, the éminence grise of management teaching, Peter Drucker, had already pointed this out. In his book, The Effective Executive , he says, “It is the duty of the executive to remove ruthlessly anyone — and especially any manager — who consistently fails to perform with high distinction. To let such a man stay on corrupts the others. It is grossly unfair to the whole organization.”

This is exactly what both Infosys and the Congress failed to do. When their leaders started failing, the worst that happened was a shuffling around of roles and responsibilities. No one was actually fired. Worse, even when there was some change, it stopped short of the top. Sonia and Rahul Gandhi continued (and still continue) supreme in the Congress. The founder promoters have stayed founder promoters at Infosys (those that haven’t moved on on their own, that is).

The outcome has been disastrous for both. Investors have punished the Infosys stock, while voters have punished the Congress. Because both could see what those at the helm in these organisations clearly could not — the lack of accountability at the top.

In leadership roles, says Henry Browning in his book Accountability: Taking Ownership of Your Responsibility , is the “acknowledgement and assumption of responsibility for actions, products, decisions and policies” and being “answerable for the consequences”.

In that aspect, the relationship between power and accountability is profoundly democratic. It tends to ignore “rights” to rule. It doesn’t matter if your bloodline holds the throne or that you happen to be the founder of an enterprise. If you enjoy the benefits of power during good times, then in bad times, it is equally expected that you either manage to deal with the problem effectively, or make way for those who can.

It is easy to forget this, especially when things are going your way and you hold absolute sway. This is why absolute rulers of every stripe, from Slobodan Milosevic to Saddam Hussain to Hosni Mubarak, eventually found themselves being held accountable. This is also why an Enron or a Union Carbide suffered, despite having ridden high earlier.

Leaders often tend to conflate fault and responsibility. The reality is that the leader is responsible, even if whatever goes wrong is not actually his fault. Ratan Tata may have sparked the idea of the Nano, but it is not his fault that it failed to succeed as expected in the marketplace.

Any organised system, whether a corporation or a nation, functions on the principle of delegated authority. Here again, authority is often erroneously conflated with responsibility. The boss can delegate authority, but not the responsibility.

This is the crux of the challenge facing Messrs Modi and Murthy. Both have already taken the first steps in delegating the authority part. Infosys is on the verge of hiring its first non-promoter CEO. Modi has abolished all ‘Groups of Ministers’ and ‘Empowered Groups of Ministers’ and instead told his ministers that since they are ministers already, they have the power to take decisions.

But empowerment is only the first step. These are tough times, both for businesses and economies. The test of leadership will be how it handles tough times. And who is held accountable.

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