In Conversation with Barack Obama

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Today I had the privilege of listening to President Barack Obama in Singapore.

He eloquently shared his wisdom on topics like global economy, political polarization, climate change, rise of social media etc. yet what got me spellbound were his incredible insights on leadership.

Obama said when you are in a leadership position, the first thing to do is to assemble your best possible talent – people with integrity, who will subscribe to your vision – and then make the best possible decisions based on the circumstances and the best available information by setting up a process to look at every problem using logic and data.

He said he believes in a constant renewal of leadership. In his point of view, most of the problems around the world are happening because of “old men” not getting out of the way – these are people who have their old mindsets, and like to quash the perspectives from younger ones.

His advice to the leaders in the room was to embrace diversity and put people at positions where they can shine, to not put ‘yes men’ around you, to not be threatened by great talent in the team or the hierarchy, and to understand and accept that you can’t master all tasks and be subject matter expert in everything. He said this is missing today in many countries leadership too.

One of the wrap-up messages stuck a great chord with me. He said “we all have flaws, our blind spots. We make mistakes. Laugh about it and then get back up. People who take themselves too seriously are brittle and can’t bounce back”.

If only we could all embrace such an open-minded leadership culture, our countries and our companies would flourish and the world will be a much better place to live in.

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WARNING: I have a SHORT FUSE

Mark is a senior manager at a reputed MNC and I’ve been his coach for the past few years. He recently took up a new job with a team of three reporting to him. But within the first couple of weeks he noticed one of them, Tracy, showing resistance to his suggestions and initiatives. Soon she escalated to their general manager that Mark is a difficult person to work with, and work for. In order not to “rock the boat” the general manager promptly re-assigned Tracy to a new manager. Despite this change Tracy continued to spread unpleasant words about Mark at the lunch table and water cooler. His attempts to be more sensitive and garner her support were all futile, driving him to consider a new job search.

When Mark called me for guidance I told him I will meet him at his office. Reaching his office I took a walk around and observed his team’s work desks. Tracy’s cubicle stood out with a loud poster on the wall which said:

i-have-a-short-fuse

Very often we, managers, tend to miss or ignore such early warning “signs” in our sense of urgency proving ourselves at the workplace or meeting deadlines. In the daily grind we tend to forget that we are all eventually dealing with people – and every individual is unique. What triggers one to stay motivated could be a total deterrent for another.

Further discussion made it apparent that there was a fundamental culture chasm in Mark’s company, and these were the telling signs:

  • Everyone knew the company’s “vision 2018” but had no clear idea how the management was executing to this vision.
  • Mark’s role and responsibilities were not properly communicated to the wider organisation by the general manager.
  • She gave him no orientation on the team, their attributes, attitudes, or background.
  • The idea of ‘change’ was alien to most of them. “It’s always been done this way” syndrome ruled their kingdom.
  • The general manager was too busy or inexperienced to coach the team, and quite often exhibited lack of professionalism in managing the people.

Managers Leaders

It is true – not all managers think or act as leaders.

Managers must demonstrate leadership by diligently communicating the vision and purpose of work, identifying what motivates their team, and keeping them motivated and committed. I covered these topics extensively in two of my earlier blog posts, you can read them here and here. Today’s leaders have an additional challenge at hand. As my ex-CEO John Chambers wrote recently, we have to go through “near-death” experience in order to make our companies great. In today’s digital world we have to constantly think of disrupting ourselves, else we will be disrupted and displaced. Managers have to act as leaders, and inculcate this culture throughout the organization.

The Culture of Change

If you want to be the best, you have to embrace change. From the top down, everyone in the organization must adapt and adopt this culture. In her most recent interview with HBR Indra Nooyi, the CEO of PepsiCo said “I told everyone that if they don’t change, I’d be happy to attend their retirement parties”. I encourage you to read the full article for the context of her statement, and also for some incredible lessons from her experience at PepsiCo.

When Lou Gerstner remarkably turned around IBM, it was through wide-ranging programmes of management culture change, and diligent focus on execution. In his book Who Says Elephants Can’t Dance, Gerstner says “The hardest part of these decisions was neither the technological nor the economic transformations required. It was changing the culture – the mindset and instincts of hundreds of thousands of people […] It was like taking a lion raised for all of its life in captivity and suddenly teaching it to survive in the jungle.”

Coaching Tips

Let’s re-look at Mark’s case now. It is apparent that his general manager showed poor judgement by instantly re-allocating Tracy to a new boss. A better approach would be to first have an open unbiased session with Tracy and Mark, and observe his communication style to learn what makes Tracy so sensitive about it. As a leader she should then coach her whole team to collaborate, ensure they all understand the company’s strategy and execution plan, clarify to Tracy why they hired Mark as a change agent, and reinforce that there will be more changes coming ahead, and for the better. Keeping Tracy happy is a myopic approach, because if she continues to light her short fuse the whole team’s future could be in jeopardy. As for Mark, building rapport with the team, and taking Tracy’s poster as a warning sign to adapt his communication and delegation style accordingly, could have saved him half the trouble.

Here are 3.5 things you can do as a leader to inculcate the right culture in your company:

1. Communicate

Communicate your vision, strategy and execution plan all the time… simply, and consistently. Garner feedback, get people involved and aligned. Make sure everyone’s roles and responsibilities are clearly articulated, but don’t let them build silos.

2. Set an example

Be authentic, passionate, decisive, demanding, consistent, impartial, and firm. Be a role model for the whole team. Get the culture right, and be maniacal about driving it through the length and breadth of the organization.

3. Coach

Stick to the strategy and demonstrate in execution. Don’t tell them “this is how I do it.” Teach them how to fish, don’t give them a fish every time. Give them the tools to do their job. Understand every team member’s motivational triggers and sensitivities, and adapt your coaching style accordingly.

3.5 Zero tolerance

Do not tolerate mediocrity, and certainly do not tolerate people who are unable or unwilling to operate within the values – no matter how talented, experienced, or apparently successful they are. Remember that letting small things go unfixed can have surprising repercussions.

So are you are a manager aspiring to be a leader? Go ignite your people’s passions, not their short fuses.

Looking for ways to screw up your Emerging Market business?

In 2014 McKinsey published an insightful article that provided a great perspective on ASEAN – the seventh largest economy in the world, its multi-dimensional diversity, its high growth potential, etc. Most western multinational Companies recognize the importance of entering this market, but they tend to look at the exciting stats, build strategic growth plans without truly understanding the complexity of the market, and eventually go down making losses. ASEAN is just an example here, this is also the case with other emerging markets like China, India, Latin America etc.

Emerging markets are complex in nature, but they don’t have to be complicated. We often complicate things ourselves by not understanding what makes these markets unique, and by not building a clear strategy and execution plan.

Have an emerging markets business in your portfolio that you want to destroy? Here are 5.5 things for you could consider:

1. Do not create localised products

Differentiate, or Die – that’s what you need to remember if you want to win in emerging markets in the long run. If you don’t develop and deliver localised and customised products relevant to the market, your business will die a slow painful death. It might be a smart approach for large multinationals to enter emerging markets focusing on the premium price segment. But do remember that this space is not a safe haven forever. If you don’t do continuous, agile, product innovation and branded differentiation, competitors will eliminate you from these markets in the long run.

2. Ignore your local competition

Asia is arguably the most competitive market to do business in. FSG has a brilliant blog post on this topic. Many Asian competitors operate in a factory model. Vertical integration, low cost production, extremely lean OPEX model, aggressive management that drives volume share gain as their key KPI – add up all these and you have a tough battle to win if you are a multinational corporation. If you don’t plan a differentiated product roadmap and a consistent brand superiority strategy across all touch points, you will lose the battle over time. Needless to say, this needs a very disciplined cross-functional execution model.

3. Do not build a dynamic distribution strategy

Most emerging markets have a fragmented multi-tier distribution model. See this China example. It is not a walk in the park to tightly manage all tiers of distribution and ensure inventory sell through and revenue growth. Yet another decision MNCs face is to operate via distributors vs. going direct. You need to consider multiple factors before making a decision to go direct – including your targeted geographic and channel breadth, your distributors’ appetite to grow, their support infrastructure to help you scale your business, your own organisation’s constraints on OPEX spend etc. If you do not build a strategic distribution plan that addresses all these factors, you will eventually fail.

4. Live and breathe the mantra “one size fits all”

One size doesn’t fit all when it comes to emerging markets’ channel landscape. For instance, if you are an FMCG company you will quickly learn that the levers to pull to gain mindshare and win at small format resellers are totally different from that for a large format retailer. One way to avoid the pitfall of doing the same thing for everyone is to properly segment your customers. Rigorously implement this across the value chain, and repeat this segmentation exercise on a regular cadence to see how things change as you scale and grow.

5. Operate with myopic investment mindset

The myopic mindset is to look at past years’ results and make budget and investment decisions. Really dumb executives tend to react to market volatility by thinking short-term and re-directing their investments into mature markets. Some even eliminate headcount in their emerging regions, citing excuses that they can return to the market when the market is ripe again. I have seen some companies setting myopic KPIs which prematurely kill any future growth-oriented investments for these frontier markets. Want to fail? Continue doing these things.

5.5 Build the same operational model for emerging markets and mature economies

Asia is a unique region – you have some of the most transparent economies next to some of world’s most corrupt nations. Political changes could happen any time and they will influence your decision-making. Currency fluctuations could catch you off-guard. Regulatory systems may be immature, and in some cases non-existent. If you are operating in a highly regulated industry (eg. healthcare) expect to experience tons of roadblocks that you will have to patiently remove as you make your way into growth. Be prepared to get surprises from regulatory bodies and authorities like Customs. A sure-fire way to failure is to ignore all of the above, build no rapport with the authorities, develop no government engagement strategies, and do business like how you operate in developed economies.

As multinational companies start to look for growth it is normal to have an eye on emerging markets. My advice – don’t set yourself up for failure. Understand and acknowledge the challenges of operating in this environment. Attract and retain senior-level talent who have “been there & done that”. Prepare for roller coaster rides. Things will be complex here, but don’t become the moron who makes it complicated.