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‘Biz is more common sense than academics’

business Updated: May 23, 2012 23:34 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times
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As the head of a hospitality company straddling nine hospitality brands including Le Meridien, Sheraton and St Regis, Frits van Paasschen, president and chief executive officer of the $16-billion (Rs 88,000-crore) Starwood Hotels & Resorts Worldwide tells HT that the key component of his leadership style is communication right down the hierarchy. Excerpts:

How do you define a leader?
We are living in a time when things are changing more quickly than ever before. In such times, leadership is not about managing the status quo, but literally about leading the people to a new place and a new way of operation. As the world becomes more complex, the notion of the “crowd sourced” strategy of management — having a dialogue directly with associates — is critical.

As a leader, what is the biggest crisis that you have faced?
For most of us the financial crisis of 2008 marks the most dramatic episode that collectively affected us. As a leader, what I learnt from the crisis was the importance of communication and the importance of being clear about what we as a company was doing about the crisis and what the implications of those decisions were. In a business like ours with presence in over 100 countries with so many associates, there was almost no way you could communicate too much. The absolute standard about the importance of communication was very high. It tested my ability and the ability of my leadership team.

What are your views on managing leadership transition — one of the biggest challenges of corporations?
From my own perspective, it is important to know the people who report into me. It is also equally important to know the people who report to them, in order to develop a broader perspective. In general I think succession planning and having a transparent career growth plan with a consistent vocabulary through a uniform performance matrix is critical. I don’t think today’s business environment requires many managers. It requires more leaders of small units rather than have a monolithic system.

Who are the leaders that have inspired you?
I am a keen student of history and I believe lessons from the past can be very useful. People whom I draw inspiration from include Benjamin Franklin, a statesmen such as Nelson Mandela, and independent European thinkers of the renaissance period. In many respects I find reading about them is much of an inspiration. I have also benefitted from the mentorship of a large number of people along the way. I think the notion of a self-made man or a woman for that matter is a bit of a myth. We all enjoy the support and mentorship of people along the way. Human resources systems are important, but inspiration and mentorship are equally important.

How important is communication in leadership?
The challenge of leadership boils down to communication. Leadership is about taking people to a new place. You need to read a situation, articulate what that situation is and talk to people about the change is. Defining a culture, changing a way of doing business and articulating a strategy is fundamental.

What is your leadership mantra?
My mantra is to “listen first”. A leader should not state his or her point of view unabashedly at the beginning of a discussion. If a leader if you do that, you shut down a conversation. If a leader walks up and says the sky is blue, nobody in the room will be comfortable pointing out that it is untrue as it is night actually. Business is more about common sense rather than an academic pursuits. Things are either fairly straightforward or incredibly complex and unpredictable.

The two pillars of a start-up: talent and experience

Best talent is passionate talent, which does not just look at money when it comes to choosing a firm or work profile. We have some very passionate people who joined us when I had just started Valyoo. With time, when they saw that it was all worth it, they stuck around. So the definition of best talent is not expensive talent.
Pay scales are always a matter of concern. You cannot always afford to match up to the Big Guns in matters of compensation. However, try to play fair and make an effort to offer salaries commensurate with experience. Reward good performances by recognising them publicly and reinforcing hard workers through appreciative gestures like gift vouchers etc. Be very upfront and transparent about the role and be communicative.
(Peyush Bansal, Founder & CEO, Valoyoo Technologies)

For a start up, “the people factor” is of paramount importance right from the business plan phase. As William Sahlman, a Harvard professor and an authority on entrepreneurial ventures explains, if there is no right team, none of the other sections of the business plan matters.
A new organisation needs thinkers, implementers, coordinators and doers in equal numbers. For a start-up, hiring people with knowledge and expertise is need of the hour. Corporate recruitment goes largely by identifying potential but a new set up needs experienced experts. It would be good to seek professionals who are embarking on second careers. These are successful people at cross roads looking for a mid-career change. And again, picking winners will be the key.
(E Balaji, MD and CEO,Randstad India)