At a recent breakfast roundtable in Chennai organised by the Delhi-based International Market Assessment (IMA), D. Shivakumar, Managing Director, Nokia India, addressed the CEOs of a host of medium-sized companies on leadership issues and the mistakes that CEOs often make in dealing with the organisation team that reports directly to them. Shiv, as he's known widely in the corporate world, drew on his almost 10 years of leading the country's largest multinational corporation, also drawing and distilling knowledge from his many years of experience in that school for CEOs, Hindustan Unilever. His crisp presentation was followed by a vibrant exchange of views by the assembled CEOs of several leading Chennai-based companies. Business Line was invited exclusively to sit in on this talk and presented here are some gleanings from Shiv's presentation. He prefaced his talk by setting the context for CEOs today.

The world is getting far quicker. Cycle times have dropped by half for every single product category from cars to mobiles. It has huge implications for your innovation plans, on the way you go to market, and the way you invest in new businesses.

Second, the world is less predictable and much more complex. In the past you were confident that 40 per cent was in the white zone, another 40 per cent in the black zone, and the rest in the grey zone. The ability to handle that 20 per cent was what defined you.

Today, I will say that grey is much larger, more like 60–70 per cent. So, the CEO's role has changed. The CEO's role used to be a reward in the past, but now, a number of CEOs I speak to are not sure if it's a reward or a punishment. The challenges for a CEO are immense.

In the past, if the CEO wanted to take a holiday, he could, and it would not be possible to contact him. He would have assigned a deputy.

But, today, technology has changed all that. With e-mail and mobile, the CEO is on an electronic leash 24/7.

Now, anybody from your stakeholders and mediapersons to suppliers can contact you. The demands of the CEO are of a higher order than ever before.

The two qualities that people are pushing for much more in CEOs are decisiveness and holding people accountable. Today, you have to decide in the grey zone (a lot of flux), you cannot make that an excuse. And you also have to hold people accountable in the grey zone.

What are the common mistakes that CEOs make, especially with their direct reports?

I've been a CEO for some years and made a number of mistakes as well in my career. Here are some learnings:

The CEO sets lenient standards for himself and his/ her direct reports

This is a big common mistake, but the standards that you expect from yourself and your team have to be significantly higher than what you expect from everybody else. I can give you a number of examples: let's take time management. Most CEOs don't arrive in office on time, which is an empirical fact. They believe that being CEO allows them that perk, but the organisation does not believe that. If you expect everybody else to be on time, you better be there. Also, very few CEOs read the papers they are sent before a meeting. CEOs expect meetings to be run promptly and minutes to be recorded, yet, they don't have their ship in order.

Please remember, today, CEOs are more than ever under a microscope. The average life of a top Fortune 500 company is 18-24 months. There is very little room for error. If the CEO is not disciplined, you cannot expect the same from the team. You have to demand a higher standard from yourself as CEO and from the team.

The CEO vacillates on the infighting in his team

By definition, a CEO's team comprises people who have functional responsibilities. The challenge with such functional heads is that they bring that bent of mind to the table. But the CEO is supposed to be thinking of the business overall, not the function alone, where turf battles are being fought. The CEO cannot vacillate and favour one function above the other. This is a common mistake. In order to overcome this challenge, the CEO should be good at at least three functions. One, is the function of their calling, from sales, marketing or accounts; the second is people, you have to know people and the dynamics of HR well; and a third one of his choice. Typically, seven-eight functions report to the CEO. You should be good at least three of them, or the ability to add value down the line is compromised.

Your team will see you as a uni-dimensional person. The questions you need to ask yourself is whether you need a team of stars or a star team. It's very easy to get the former. When you get everybody to think business and brand, then you have star teams.

CEOs overcook the consensus part

We try to ensure that everybody is on board on a decision — big mistake! After making that mistake, I learnt a simple rule — 60 per cent agreement, but 100 per cent commitment. I go around the table, take all the views from my team, and tell them I understand where they are coming from, but this is the decision, and I expect 100 per cent commitment from everybody.

You will never get 100 per cent agreement on everything. Let them know their voice is heard but once a decision is made, they need to go along with it.

The CEO treats everyone on the team equally

Another mistake a lot of CEOs make is that one tends to treat all the people in one's direct team equally. I would say you need to treat your team equally but differently. On discretionary parts, you must be equal, but on emotional parts, you must treat them differently.

Some people need emotional support, and others don't need it all. Some are worried about their children's education, relocation and so on. So, the emotional needs of people are different. Only when you vary your emotional response to different people, can you get the best out of them.

The CEO believes what he is told by his direct team

I am a great believer in what Ronald Reagan used to say: trust but verify. I trust what I am told, but independently verify the details. You need to have your own bearings, otherwise, you can be misled by the very intelligent, super-efficient, articulate people who report to you. If you want to get the best out of them, verify. Just walk around the company and ask naïve questions and you will get the right answers. This is an important lesson I learnt early in life; if something matters to you, you will remember it. Naïve listening and lunch-time conversations can help you glean info.

The CEO is susceptible to a healthy ego massage

The CEO is susceptible to an ego massage and you need to be careful. The best CEOs shoot for wider respect in the organisation and don't shoot for popularity. If it's for popularity, you can end up doing the wrong thing. Shoot for respect and you can end up doing the right thing. Please think legacy of your term as CEO, not your tenure. And, never confuse personal loyalty to institution building — a person who may not be loyal to you may be a great guy at institution building.

CEO mistakenly assumes that his direct reports will always do what's right for the company

This invariably happens. The biggest issue is on resource allocation — whether of people or material. This is where people do all the wrong things because they are protecting turf. The biggest challenge for the CEO is that 90 per cent of your team will think function first and business next. Because, in their own minds they feel that if they don't fight for their functions, they won't be seen as strong leaders by their teams. Here, the CEO has to step in and stop the insecurity. Second, you will always have people who will be very good at managing you and very poor at managing the team. Trust me, this is because the CEO is turning a blind eye to him. People will ask why the CEO is tolerating that kind of behaviour? CEOs are responsible for the bullies in the organisation, because the CEO tolerates them.

Nothing is more weakening of the CEO's role than this. The organisation expects to listen to the CEO and talk to him, that's the reason they have given him the job. Mother Teresa said it best when she said the role of the CEO is a contact sport, you need to go around shaking people's hands and holding shoulders. That's the role of a CEO. This cannot be outsourced! The CEO's role cannot be communicated through direct reports. There's nothing called enough communication, you've got to say it again and again. Putting it on the Intranet is a silly thing to do, nobody goes there. You have to communicate what matters to you and the company, whether it's values or compliance.

One company that over-communicates on safety is Castrol. Every Castrol meeting starts with a safety drill. It's become a rule with them, wherever they sit, they start with a safety drill on how to get out in case of an emergency. You are the leader and people want to hear you, see you and chat with you.

The CEO overprotects his younger team members from the wolves

You don't need to protect your younger members. If he's good enough to be on your team, then he can take care of himself and he better learn to swim. The moment you protect someone, you create artificial barriers. In a board room, everybody there has their roles to play. At that level, he should know how to handle himself and win or he shouldn't be there.

The dilemma of being hands-on and hands-off

If there's a problem, the tendency for a CEO is to jump in and solve the problem. I believe in the philosophy of micro sensing – I have a sense of what's going on by meeting customers and suppliers and talking to a number of people in the organisation. I refer back to the guy on the field that this is going wrong and attend to it. I mention it once and twice, if it's serious enough and he's not doing it, then I pull him up. He has his own way of dealing with it and I leave it to him. Micro managing takes away the power from your subordinate, but micro sensing can actually empower him. For that you need to talk to a number of people and be aware of what is happening in the organisation. Talk to your competitors, they invariably know better than you, what's wrong in your organisation!

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