Gary Coleman, managing director, global industries, Deloitte believes that a leader has to be extremely empathetic, extremely honest, and to the extent possible, extremely fair in the scenarios of layoffs. He spoke to HT on a range of issues on leadership on the sidelines of the World Economic Forum’s India Economic Summit. Excerpts:
How do you define leadership?
Leadership is about creating a vision, setting a strategy that others follow and making an impact through initiatives that are important to society. Leaders are creative. They are visionaries, they are team builders and they are great communicators.
How important is communication in leadership?
Very important. If you cannot communicate a vision or a strategy, I don’t think you can create a following.
Can leadership be learnt?
Yes. But, it has its limits. I think there are ways to help develop leaders. But, not everybody can be developed into a leader. I think there are certain innate characteristics that make some people better managers than leaders. To me managers are people who know how to write and execute business plans. Those are different activities.
What is the role of professional leader in a family run business?
We tend to characterise a family-run business as a small unit. In such a company, creating a team, defining the vision, laying out the strategy and building a team is probably different from a $10 billion or $20 billion company.
In such family run businesses, the leader is one who holds the family together. For large companies, even where the family owns a significant equity, the leadership characteristics tend to be more similar to the large Fortune Global 500 companies. A leader in Walmart probably has more characteristics like a Fortune Global 500 company, rather than leader of small family run business.
Leaders have to often carry the cross of other’s wrong doings and inefficiencies. What role can good leadership play to counter balance this image?
Leaders get dealt different hands all the time. Some leaders get dealt a good strategy that is being implemented and they come into office and ride a wave. Others get dealt a poor strategy or a poor set of events. Good leaders will have to deal with both good and the bad hands.
How difficult is it for a leader to deal with employee retrenchments?
A leader in a scenario around layoffs has to be extremely empathetic, extremely honest, and to the extent possible, extremely fair. If a leader follows these characteristics, then as unpleasant as layoffs are, they will be able to deal with these in the best possible manner. Throughout my career, I have had to let people go, get them reassigned. It is not pleasant. It is probably the most unpleasant part of my job.
Very high CEO bonuses have attracted a lot of criticism. Your comments.
I agree that at times leaders are awarded stock options that may not have lot to do with their own personal involvement. But, I don’t see the solution in regulation. I see the solution more about the board of directors being more proactive in governance. CEO compensation is the board’s decision. While extremely large bonuses appear to be fair, the solution lies with the board of directors and shareholder involvement in that activity.
Which are the leaders that have inspired you?
In the area of business disruption, Henry Ford stands out. Business being disrupted means challenging the existing status quo, thinking of the consumer and by designing a business model that is so significant that it attracts the consumer.
In the area of tough choices, I have always been inspired Margaret Thatcher.
What is the biggest leadership lesson you have learnt?
Understanding how to bring the rank and file along a transformation journey.
Businesses often go through large transformation. There is an awful lot of communication that has to be done to bring the rank and file along that journey
What is the worst decision you have taken?
Sometimes not listening to important stakeholders has been a mistake. It is more a result of impatience rather than over-confidence. You sometimes succumb to the need for speed and that comes at the cost of not bringing other stakeholders along. It cost me some degree of personal credibility.
And the best?
As a board member in 2008 and 2009, in high levels of uncertainty during the financial crisis, I voted for several billion dollar-plus investments. That was very, very hard decision to take.