Leadership is ‘doing the right things’
Rashesh Shah, chairman and CEO of the Edelweiss Group, has been in the Indian financial services sector for over 20 years. Before Edelweiss, he worked with ICICI, then India’s premier industrial development bank and today its largest private sector bank. Excerpts from an interview:business Updated: Feb 27, 2013 22:19 IST
Rashesh Shah, chairman and CEO of the Edelweiss Group, has been in the Indian financial services sector for over 20 years. Before Edelweiss, he worked with ICICI, then India’s premier industrial development bank and today its largest private sector bank. Shah founded Edelweiss in 1996 with equity capital of R1 crore. His focus on innovation and passion for growth through expansion have been a key differentiator for Edelweiss, helping it combine growth-oriented entrepreneurship with a strong focus on risk. Excerpts from an interview:
How do you define a leader?
A leader is someone who has a vision, is capable of inspiring others so that this vision becomes a common goal, and is able to get them to work as a team, to achieve things that would be out of reach if they worked individually.
We have a well-defined, multi-layered programme of identifying and cultivating leaders from the early stages of their career. Once identified, they are empowered. There is constant communication with this group to encourage them to think and act one or two levels above their pay grade, which helps them reframe perceptions about potential, and gets them to think like a CEO. The results are astonishing.
Can leadership be learnt? How can a manager become a leader?
Some qualities of a leader are innate; for instance, a sense of values and integrity. But beyond this, leadership can be learnt and has, in fact, been learnt through the ages. Just think of the way professional armies have trained their leaders. Being a good manager is a necessary starting point, but to be a leader you need to learn new skills and make a transition.
There are many facets to this. You need to graduate from being a specialist to a generalist. You also need to be able to integrate the collective knowledge of cross-functional teams, and make appropriate trade-offs to solve complex organisational problems. Managers can afford to focus on tactics but to become leaders they need to learn to strategise, look at the larger picture, figure out patterns and anticipate the influence of external factors.
What is the role of a professional leader in a promoter-driven company?
“Promoter-driven companies” are a peculiarly Asian concept, where the founders continue to hold sway over management decisions by the fact that they promoted the company. In the West, especially in the US, ownership and leadership are generally divorced.
When the goals of the promoters and professional leaders are in alignment, it has produced near miraculous results. In these cases, the role of a “professional” leader is no different from what it would be otherwise — growing the business in the most profitable manner so as to create value for all stakeholders. However if the goals of the promoters and other stakeholders diverge, it puts a lot of pressure on the “professional” leaders, who then have to perform a high-wire act, needing a lot of skill and tact.
Since September 2008, the world has fallen into a maelstrom of crises. What is the role of a leader in these times?
The true test of a leader — be that of a company or a country — is how he or she deals with crises. If we look at great leaders in history, a few common themes emerge. It starts with recognising that there is a crisis and then goes on to understanding the root causes.
The next step is to recognise how bad things are, and if they could get worse. To paraphrase Peter Drucker, leadership is not just doing things right, but doing the right things, demonstrably and repeatedly. A leader must build trust, the key to tackling any crisis. One adage that we have always followed: ‘Never waste a good crisis’. Every crisis has the seeds of an opportunity.
What has been the biggest leadership challenge you have faced?
The two biggest challenges for any organisation are scaling up, and then to re-orient it once it has gathered scale. For us the initial challenge was to get potential employees and investors to believe in our idea that India needed new-age diversified financial services providers — which we wanted Edelweiss to be. The second big challenge was our expansion from being capital market-centric, diversifying it into adjacent spaces such as credit, commodities, housing finance and life insurance.
What is your one-line leadership mantra?
To quote former US Secretary of State Henry Kissinger, “The task of a leader is to take his people from where they are to where they haven’t been.”
What is your best leadership decision?
We have always set our goals and aspirations very high and have made sure we never lost focus of these because of short term challenges.
And the worst?
With the benefit of hindsight, I realise that our timing on a few decisions may not be perfect. For example, perhaps we were early with our IPO. We were in the process of building new businesses and looking back, I now feel it would have made more sense to approach the markets a couple of years later.