(This piece was written during the run-up to the 2014 general elections. Suddenly looks relevant in light of the Tata-Mistry saga)
Over the last few days we have been hearing how Narendra Modi has been ruthless and shunting out the old guard in the BJP. People have been talking about how seniors deserve respect and Modi is not giving them enough of this.
While by no means is this a piece on BJP politics, one
cannot but see similarities to Corporate world. Don’t know if Modi is picking
lessons from Corporate or the Corporate world has to learn some stuff.
A lot of times, when the person at the top changes, so does
the management structure at Level 2 or even Level 3. The CEO brings with him /
her, his/her own set of people whom the CEO is comfortable with. It is
extremely important for the CEO to have a free hand in this. While the
organization is going through a change, it cannot change its stripes fast
enough with older thought processes.
First of all let us understand why, this change is required.
The earlier CEO may not have got the results or simply has resigned / retired
due to age / tenure. In the first case, there is a need for new ideas and new
processes. Each CEO will have their own protégés or trusted lieutenants. Change
is the most difficult thing to accept and hence, these trusted lieutenants
could cling on their older beliefs, which are not giving results. Thus there is
“deadwood” in the system which needs to be removed or else the jungle will just
not grow.
The new CEO sets about just doing that. In case a successful
CEO moves on, he is replaced from someone within the system, generally who is a
protégé. This person goes about on the same path as the previous CEO and hence
faces lesser resistance. However this person faces different problems. This
person is suddenly now asked to head a team, which comprised of peers. It is a
very tricky situation and people are firstly unhappy of not having made it to
the top. They believe that they should have been the chosen ones and hence
starts the process of “sabotage”.
Hence in both cases, one finds that teams change with change
of CEOs. A prime example is of a leading private sector bank in India, where,
when a highly respected and successful chairman stepped down, the entire
management team was shunted out (or moved out).
The new CEO needs a free hand to succeed. Does it mean, none
of the old loyalists survive? Not necessarily. People who are “loyalist” to the
person may get shunted out. People who adopt change and accept the new guard
will survive in the new system. A prime example is another Advani loyalist,
Sushma Swaraj. While she has accepted Modi’s leadership, she is making noises
in the way some people are being treated. Why is she not being shunted out ( As
I finish writing this she may be…)?
Remember the world at the top is very lonely. It is very
easy to be surrounded by sycophants or yes men. Sometimes the advice can be
everything the new person does is right and everything the old person did was
wrong. This statement can be nothing further than the truth. Also one can be
blinded by success or potential success. Jamie Dimon says, you need to be
surrounded by people who tell you the truth. If Modi has to succeed, he needs a
Sushma Swaraj, who will tell him the truth even if it is bitter. However there
is a difference between “sabotage” and “constructive criticism”. While
“sabotage” is a word from the world of espionage, it exists in all
organizations (political as well as non-political). The perceived dividing line
is very thin. As long as it is constructive criticism, Sushma Swaraj has an
extremely strong role to play.
As a matter of fact, she could turn out to be Modi’s biggest
asset. She is the “mirror” in Modi’s party and has her value in the entire
scheme of things.
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