THE THREE UNCERTAINTIES OF LEADERSHIP

9th June 2008, ECONOMIC TIMES

In 1927, Werner Heisenberg stated a principle of uncertainty in physics and that won him the Nobel in 1932 i.e. that you cannot simultaneously assess the precise position as well as momentum of an atomic particle; to assess its position, you have to aim another atomic particle at it and that changes its position and momentum. Likewise, in leadership, you cannot simultaneously judge a person’s attributes as well as future behavior because the mere act of assessing impacts the other.

9th June 2008, ECONOMIC TIMES

In 1927, Werner Heisenberg stated a principle of uncertainty in physics and that won him the Nobel in 1932 i.e. that you cannot simultaneously assess the precise position as well as momentum of an atomic particle; to assess its position, you have to aim another atomic particle at it and that changes its position and momentum. Likewise, in leadership, you cannot simultaneously judge a person’s attributes as well as future behavior because the mere act of assessing impacts the other.

There are far too many delicate things about leadership. What was said of medicine in 1892 by the father of modern medicine, Sir William Osler, could be said of management, “If only all patients were identical, medicine would be a science, not an art.”

Leadership is hugely complex. You can gain from books, but it remains a delicate art. As with golf, paradoxically, the challenge increases with the level of accomplishment. As soon as you think you have got it right, you are set to get it wrong. Perhaps that is why company leaders are increasingly taking to golf.

Some 15 years ago while I discussed when leaders should step off with the first Indian chairman of Hindustan Lever, Prakash Tandon, he said, “It depends on whether it is 15 minutes to midnight or 15 minutes after. The difference is not 30 minutes; it is a whole day on the calendar.”

Some names stand out as people who stepped off with a great sense of timing, people who played their part and moved on around their peak: Pete Sampras in tennis, Steve Waugh in cricket and, in business, Arun Sarin at Vodafone, Lou Gerstner at IBM, N. Vaghul at ICICI, Narayana Murthy at Infosys and Ravi Mathai at IIMA. People may not associate a sense of timing with some others: Wolfenson at the World Bank, V. Kurien at Amul, Chuck Prince at Citibank, Thabo Mbeki in South Africa.

Another aspect about leadership is the enormous space between occupying the hot seat and showing the immediate potential to do so: consider the steep downward image trajectory of the current British Prime Minister. Just like you are never prepared enough for death or parenthood, you are never quite prepared for the hot seat—until you feel the heat on your butt.

And that is precisely when everybody seems to be watching you. Any ‘natural action’ by you gets amplified and analyzed into unintended interpretations by your employees and associates. To write ‘people-oriented stories’, the media projects the CEO as the hero. Can he overcome the perils of such reportage?

What, for example, are market watchers looking for? Self-assuredness, bold statements and clear strategic actions. Billions are won or lost in the capital markets on such cues! You might have asked Jeff Immelt when he took over from Jack Welch or Kumar Birla when he was first thrust into the hot seat; or these days, ask Vikram Pandit at Citi or Tony Hayward at BP.

Leaders are selected after competition which is nil, feigned, visible or ferocious. The American system of electing the President is an extreme example. Barrack Obama’s journey to the Democratic nomination has displayed the spectatorship value of a T20 cricket match. Such a process brings out realistically how the candidate responds to psychological pressure, disappointment, attack, competition, physical stress and other challenges that he will encounter for sure.

In company succession planning also, there can be an equivalent process, though perhaps less forceful and visible. It is not clear if this is good or bad, but there is something to be said for a healthy dose of real competition. The winner is rewarded, but the risk is that the other person may be lost to the company.

How Jack Welch ran a competition among three, and lost two from GE as he recommended Immelt to the Board is a much told story. In the CEO selection at Hindustan Lever, more often than not, there has been more than one candidate in the running. Sometimes the both aspirants stayed; in other cases, the unsuccessful aspirant left and did very well elsewhere–as has been the case with GE alumni.

I recall a Science magazine report a few years ago on an experiment that scientists did on the growth patterns of snails. A species of snails was first grown in a comfortable environment, free of any predator. The snails started to reproduce when the shell size was 4 mm and their lifespan was 4 months. The same species was then grown in an environment where there were crayfish, a predatory lobster. The snails postponed reproduction till their shell size became 8 mm. Their longevity became 12 months instead of 4 months earlier. The scientists hypothesized that when faced with the threats, the snails reallocated their resources away from reproduction towards growth and community survival.

It is similar depending on whether there is little or no competition in the selection of the new CEO. In low competition situations, the candidate’s responses to tough leadership struggles are not easily visible. There are reports about ‘uncontested’ selections like Doug Ivester at Coke or Ray Gilmartin at Merck; it is difficult to prove that their pale record as CEO has a connection to their selection process, though one does wonder.

In politics, think of internal party democracy and dynasty politics in the Indian sub-continent. The chances of missing the derailing flaws of potential party leaders are higher in the absence of competition. Regrettably, the converse is not assured i.e. that a competitive selection assures a successful CEO. In the end, in selecting leaders, it is about increasing the probability of success; it is about framing the right questions.

Is this a person who can deal fairly and graciously with his former colleagues? Is he absolutely the best in relationship-building skills? Is he a leader who can build a top leadership team rather than emerge as a top leader himself? The pomp of power distracts from having the genuine belief that it is the team that delivers.

I read a story about the battlefield in which the caparisoned elephant charges around and won the battle. A flea, sitting in the elephant’s ear, smiles and thinks, ‘I sure shook them up.’

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