Management guru Robert S Kaplan, credited with innovative practices — ranging from Balanced Scorecard to time-driven Activity-Based Costing — says the most challenging time for a leader is when things go bad. The Marvin Bower Professor of Leadership Development — Emeritus, Harvard Business School (USA) speaks to HT on leadership development. Excerpts.
Your Balanced Scorecard is a success. Do you think it’s still relevant in 2012 and will be in the future as well?
It has the permanent approval of managers and managements. Without Balance Scorecard (BS), companies have only financial reporting system. It was fine for 20th century enterprises, where values came from physical aspects such as inventories, retail etc. But companies today use intangible assets such as customers’ loyalty, innovation etc for which we need to see beyond the financial system. There is a huge gap between the vision and strategy developed at the top and the people down in an organisation. There is a need to bridge the link between strategy and employee empowerment for continuous improvement. BS provides that link.
Often, the most innovative ideas arise first in business and not in a business schools. How can this gap be bridged?
There does exist a gap. The challenge before business schools is to identify innovative practices and capture them. However, business schools and universities are more into academics. The need is to break through the academic barriers.
How important is the role of communication in leadership?
Any leader has to be an effective communicator. If a leader wants to take an organisation ahead, or in the case of a leadership change where it is not natural for people often to accept the change — effective communication plays a crucial role.
Often, leaders or frontline managers fail to develop a second line of leadership in an organisation. Why?
Probably insecurity and fear are a part of human characteristic. A leader who fails to develop a second-line of leadership is not a good leader. The most important role is to develop a successor in an organisation. Leaders have to allow themselves to be vulnerable, but not weak. They should allow others to challenge them and should not take punitive action against those who challenge, because it helps in generating ideas.
What basic qualities should a corporate executive have to be a future leader?
Effective communication, accepting challenges, risk-taking ability, encouraging others to develop and authenticity. Leaders should be able to walk the talk — follow the principles he talks about and reinforce the message he gives to people.
It is said, ‘great leaders are born and not made.’ Your take?
Not true. Leadership qualities can be nurtured through training, through specific career assignments, new challenges, new businesses and new regions and culture. We have to reinforce the traits within people, teach them through cases, and influence their thinking.
Can business schools groom leaders?
A strong commitment is needed for that and depends on faculty members. For example, former chief executive officer (CEO) of Medtronic, William George, who penned Authentic Leadership joined Harvard Business School faculty after retirement. Within five years, the elective course he was teaching became the most popular one, with 75% students opting for it.
How important is the role of a corporate leader during slowdown or chaos?
The most challenging time for a leader is when things go bad. A great leader gives hope. If people find the leader discouraged, they stop working. A leader should be the one who is able to inspire others in adversities.
What has been your best leadership decision?
During one of my first assignments at Carnegie Mellon University, I was asked to teach accounts, which I didn’t study. But, I could do it well and I realised that I had the natural gift for accounts and I was unaware of it. I used my quantitative skills in research and teaching. After 15 years when I switched over to HBS, the same was used to develop new practices in business research.
And the worst?
May be the decision to become dean at Carnegie Mellon for six years. My functioning was more administrative than scholastic. But it exposed me to business practices, which otherwise wouldn’t have been possible.
And your leadership mantra?
I’ve a simple message. Measurement plays an important role in the management system and I devised it. Often frontline employees or middle managers don’t understand what leaders communicate with them on high-level strategy and vision. A leader has to ensure that his employees understand the strategy better through measurable objectives, so that it can be translated into local action. And, take a position and do the work you love and don’t regret it.