5th July 2019 BUSINESS STANDARD
(*The author is a corporate advisor and Distinguished Professor of IIT Kharagpur. During his career, he was a Director of Tata Sons and a Vice Chairman of Hindustan Unilever. His latest and new book is Doodles on leadership: experiences within and beyond Tata).
Kibitzer is a Yiddish word for a spectator of bridge or chess, who offers unsolicited advice in chess, bridge, sports or even business.
Some leaders respond positively to unsolicited ground signals, incorporating the messages into their transformation program–like JJ Irani did at Tata Steel in the 2000s, or SN Subramanyan of L&T did during the Mindtree acquisition recently. Nelson Peltz of Trian Fund Management pushed hard for PepsiCo to split. Indra Nooyi engaged without giving in. Nelson Peltz sold his shares and took his money. Unilever engaged and fended off the bid by Brazilian investor 3G and Kraft Heinz.
Others like ICICI, Ranbaxy and Jet Airways failed to do so in their recent episodes in India. 3G had bought Kraft, engineered its merger with Heinz and ran the company to the ground. Klaus Kleinfeld, CEO of Alcoa, got trapped in his dealings with Elliot Management, and had to step down from his position at Alcoa. Tom Buckner at Akzo Nobel responded to the bid by an American paints major by itself divesting Akzo of its chemicals business. Ellen Kullman, chairman of Dupont, fended of Trian’s Nelson Peltz to join the board, then quit, thus facilitating the complex surgery of Dupont and Dow. John Flannery, successor to Jeffrey Immelt at GE, was perceived as a very authentic and warm person, but he was removed within fifteen months of taking over the leadership of GE.
The CEO response has a connection with the ability to discern subsonic messages from deep within the organization. Like pigeons! A World Pigeon Racing competition has been going on for over a century. During the 1997 race across the English Channel from France, most of the pigeons failed to reach England—an unprecedented disaster. It appears that, quite mysteriously, the pigeons’ navigation system could not discern familiar subsonic signals from ocean waves crashing into the coast. Why? Because a supersonic Concorde had left Heathrow around 11 am, emitting its own subsonic signals as the plane broke the sound barrier. The pigeons got confused by the plane subsonic signals. They lost their way.
Likewise, in companies, a CEO receives subsonic sounds from the employees, customers and business observers. Good CEOs realize that nobody is too small to make an impact. Founder of
Bodyshop, Anita Roddick, was credited with the comment, “If you don’t believe it, try going to bed with a mosquito.” For example, an American university published an ill-researched analysis about a consumer product in India, and an obscure activist drummed up a public scare in India. Investors and analysts exert great pressure on the board by their comments and demands. Boards cannot be dismissive and must respond astutely.
The case study method has been widely and successfully used in management education. One unintended effect is that the method produces kibitzers. I recall my training days when I found fault with various CEOs while discussing case studies. Heaven knows how stupid I must have looked to my team while they observed my decision-making and actions as a CEO!
Offering newspaper critiques, writing case studies and television commentaries, all kibitzer activities, are a darned sight easier than doing the job. Howsoever irritating their suggestions may be, kibitzers are not to be ignored. In an earlier column (BS, 7th June), I mentioned that a controlled degree of narcissism is essential for a CEO to be successful.
CEO narcissism manifests through seven skills: ruthlessness, charm, focus, mental toughness, fearlessness, action and mindfulness. I am personally familiar with all seven skills through my twenty years as a CEO. Without making technically controversial statements, I have also noted the view of professional psychiatrists is that narcissists and psychopaths have similarities. They are along a continuum and belong to the same species. Both have a high self-opinion, accompanied by a low opinion of others. Success is to their credit, failures are due to external factors.
When these characteristics are bound within a limit, they work positively; if that limit is breached, the same characteristics cause damage.