Should corporates invest in leadership development?
Friday, 31 October 2014 01:48
The role of leaders came under fresh debate at the recently held forum facilitated by the Colombo Leadership Academy.At the inaugural event of the flagship leadership coaching program ‘Winning Leadership Strategy for High Performance’, a prolific panel discussion titled ‘Should Corporates Invest on Leadership Development’ was deliberated by experts in the field.Moderated by Daily FT Editor in Chief Nisthar Cassim, the panel members were Direct Solutions CEO and Joint Partner Ian Ramsadeen, Master Coach from Singapore Andy Ne, Colombo Leadership Academy Cofounder Riaz Hassen, Personal and Business Transformational Coach Archana Law and Seylan Bank Assistant General Manager HR Wasanthe SenanayakeFollowing are the excerpts of the panel discussion:By Shabiya Ali AhlamQ: What is your perspective on companies investing on leadership?
Law: I firmly believe in ‘Peter’s Principle’ where individuals in organisations are promoted to their level of incompetence. To me that translates into the fact that people have done exceedingly well in their roles because of which they are promoted to the next level. However, they may not always be equipped with skills to deal with the responsibilities and demands of that role. In reality, particularly in Sri Lanka, I see a lot of organisations bringing a serious focus in this regard and I think this is heartening.
Ramsadeen: The old Chinese proverb ‘We live in interesting times’ I think is very true today, certainly in business. I had a fairly lengthy career in certain countries and what I notice is that we invest in product research, we have product managers, we invest in market research to understand our customers better and bring about innovation out of that knowledge. But the big question is, do we then manage and create the people in order to manage that change? Markets change, we have to change. We look at the technology that is being developed at rapid pace and the people who are managing that space are being developed. In the West, in the Institute of Directors in the UK there are teams who will mentor and train managers and directors on literally how to adapt their companies and themselves to change. Change is inevitable. Learning must follow that suit.
Senanayake: If I were to share my views from the human resource point of view, investing in leadership is extremely important today in terms of business since the result of the global economy impacts businesses locally. We are on the lookout for people who can manage the immense changes that are taking place. We want managers who understand those changes so we can actually face challenges and take the business forward. The aim is to create transformational managers in our organisation. We strongly believe that and want our managers’ move from practical operations to strategic operations. We need to make our managers good effective leaders.
Ne: I would like to phrase the question differently. The question should be how much should organisations invest in leadership. My simple observation from years of coaching and teaching based in Singapore is that the bosses are the problems. All the problems that I find in companies are all created by the bosses. The bosses are not trained to motivate their employees. To them I say it is alright if you don’t motivate people but try not to de-motivate them. In short you can never invest enough in leadership.
Q: The board often gives performance driven benefits to the CEOs; in that context it is an investment on their part they would say. Whose responsibility is it in investing? It is the CEO’s responsibility to invest in him? How does one manage a situation like that?
Ramsadeen: It takes a brave CEO to take that personal decision himself. It takes a courageous board to tell the CEO that he requires some leadership training. I think there has to be a balance there. The CEO is rewarded by the board but if there is a deficiency seen by the board then the matter has to be fixed. Otherwise you lose strategic direction. You don’t maximise value and you don’t extract value for shareholders so you literally are stopping that CEO and the company from moving forward. I think it should be a board decision rather than an individual decision.
Law: What I feel is that learning never stops. Since we don’t want outdated norms implemented in a contemporary environment, it as critical for a CEO to move forward and walk the talk. You will want people around you to change with the times as well. However, there is a deep fear underlying this for a leader because there might be a deficiency or a lack of talent of skills and expertise in a particular area that might surface.
Ne: I think the CEO should treat himself like his own business. He should not wait for the board to give him money for leadership training but should invest on his own to train for leadership. The biggest investment is not money it is time. You get everything free on the internet and the challenge is for people to invest the time in gaining that training and knowledge.
Senanayake: Most of the leaders are realising the importance of creating a leadership culture in an organisation because it quite important. However much you invest in people, unless you have that culture in the organisation there is nothing much that will be improved. There should be positive managerial leadership. I think a leader should be humble enough to look at the competition and understand the importance of creating that culture where it is understood it is important to make that investment.
Q: From which level should leadership training start?
Hassen: From an HR perspective, a junior executive or an executive doesn’t get noticed at the board so it is the role of the HR to identify those individuals. I have come across so many companies in Sri Lanka where the HR manager had only the development plan. Recently I came across a company where they had a human resource transformation team. More than development they pay emphasis on transforming an individual to fit into the career he wants to follow. They become the mentor. Ultimately you cannot retain all the talent.
On the question should companies invest? One of the reasons why companies don’t invest is mainly due to the fear that the employee will leave shortly after the training. Corporates as a whole should increase the level of competencies in the industry. Companies like IBM know that some of the people they train leave but still they continue to invest. Leadership development should begin with the HR department and they should identify and groom early those who are ready for transition and succession. The board will be enlightened that they have people with such competencies. Early grooming is very important for leadership.
Q: At the managerial level where do you see the biggest vacuum in leadership?
Hassen: At the top level CEOs and Managing Directors go on their own and look at ways of enhancing competencies and they go get it. In the Sri Lanka context some of the corporates do not distinguish that executive education is needed to drive performance. That is one of the reasons we thought that there is space for us to come in. So it is important for corporates to retain their top level people because Sri Lanka is exposed to a lot of brain drain with migration. And within that context if you lose more people you will basically be exposing this country with more foreigners. I keep highlighting in my leadership programs that don’t be surprised if your next CEO is a Chinese because that is going to happen in Sri Lanka. You will be reporting to a Chinese CEO and there is no way of avoiding it since they are more focused. When a leader invests in him there is an assurance that he will bring a new leadership culture and style. When he is gone the style is gone. Leaders must emulate a culture that is sustainable so that more leaders are created.
Q: What is the role of the organisation in developing a good leader?
Ne: Successful companies have many leaders and they are not dependent on one person. So the word to use is leadership and not leaders. We want strong leadership; we need not have strong leaders. There are countries, such as North Korea, that has a strong leader but zero leadership since it depends on one person. Some of the European countries like Belgium for example had no Prime Minister for two years and it did not go into a recession or war. So needed is strong leadership and not strong leaders. In that case we should groom everyone to be leaders.
Ramsadeen: When I was young I was given one piece of advice. A good manager surrounds himself with people who know more than what he does. Technology is driving the future. The recent IPO by Alibaba in China which became the biggest IPO in world history, 45% of the people who access the Alibaba website in China do so using tablet PCs. That just happened in three years. That is how fast it is changing. When you look at leadership, you need to ask what is it that you personally know about tablet PCs and the answer can be written on a head of a pin, zero.
But my staffers know since we encourage them to go to technology seminars to stay ahead of the game. That way the CEO and leaders can be fed with knowledge upwards. I cannot gain that knowledge sideways or downwards since the leaders are on top of the pyramid. We have to rely on people who know more than what we do in order to be supported. In a sense the individual departmental heads collectively know more that we do and we use that knowledge to drive the business. That is where leadership comes in.
Law: Organisations have many high expectations from leaders and it is not truly possible to live up to all of them. If from the managerial perspective organisation where to give reassurance to support to the leaders that they will be judged by the results he gets with his team, it will be a great motivation for leaders.
Q: Is there one style of leadership that is better than others? Can we teach this one way of leading since that is where the world seems to be going towards?
Ne: I think the one common leadership style is to inspire. Whether you are a fast or slow worker, hi-tech or low-tech at the end of the day you should inspire.
Senanayake: I believe that there cannot be one way of leadership. It depends on the business, the culture and the people you are providing leadership to. It is important that we take up different ways and strategies to handle situations. What we notice is that in MBA programs we all learn the same thing, but once you go out there it is a different situation. Needed are the fundamental skills and innovative skills.
Ramsadeen: I fully agree with Senanayake. I only have one motto and that is pinned on my office door. It says ‘Don’t bring me problems, bring me solutions. If you cannot bring the solution lets discuss the problem’. This is subtle encouragement allowing people to think within the guidelines. The style depends on the people and the company.
Law: From a macro perspective on leadership and approaches, while they may be different there are certain principles that are common across all. The leader has to inspire, be open to change and develop continuously. Having said that no one shoe size will fit all, the process of shoemaking might be common across countries. There are certain fundamentals and principles that are common, but in execution and application there might be a slight difference.
Hassen: As everyone said there is no particular leadership style though there are forms of it which are transformational and visionary. Steve Jobs was a visionary leader but that doesn’t mean that you relate to all aspects of leadership. You have a vision and driven yourself and you will drive another set of people to achieve. Then there is transformational leadership like that shown by Lee Kuan Yew.
If you do not know what is your motto and your bigger cause in leading than you will fail. One of the newest models that is being discussed is the transcendental leadership model where the leader does not throw any form of incentive to his team. All the other leadership models promise rewards, schemes and incentives. In the transcendental model the leader says the way it is to be achieved and the employees would follow. It is observed that the model will work in the current culture.
Q: How do you evaluate leadership capabilities? Is it possible?
Senanayake: Generally when we recruit a leader, a Managing Director or a CEO, he is evaluated on what he would give you in return. That is the concept where the top line and bottom line are shown and the growth is expected to be sustained year-on-year. The leader has to focus on how much he can deliver. Weather you sustain that culture or relate to it, those tendencies are not looked upon. No matter what type of a culture you create you are expected to perform.
Pix by Daminda Harsha Perera