Odgers Berndtson recently conducted a study in association with Harvard Business Review Analytic Services. The findings of the report are based on data analyzed from the responses of almost 2000 senior executives, managers and board members across the world. Given the current times, the study highlights the importance of strong leaders in times of disruption, however, it notes that there is an evident ‘Crises of Confidence’ in corporate leadership globally and clearly, Adapt or Die is the clear message across industries in these times. Also, true leaders are naturally emerging who are collaborating with their teams to find genuine solutions.
According to the report, today’s leaders must find a way to constantly evolve their business strategy, find the resilience to drive it forward, while also being prepared to seize opportunities. With the pace of change being a major source of disruption in itself, the role of Leadership is being re-defined.
With regards to what it means to be a leader in times of crisis, we spoke to Sudhanshu Saraf, Director, Jindal Steel & Power Limited in an exclusive interaction, where he tells us about what is keeping him awake at night as a leader, certain traits that can make leaders more effective in times of crisis and also give some advice for leaders and the workforce at large as they learn to adapt to the new normal.
Saraf is best at transforming businesses. He has the competence and deep understanding of transformational philosophies such as Lean, Six Sigma, and Theory of Constraints and uses them very well in tandem. He has the change management skills which he acquired in consulting and a razor-sharp focus on cash and profit. Experience of 32 years across industries, geographies, functions and verticals, has made him industry-agnostic, a whole-system thinker and a process expert. As a business leader, he has been transforming businesses through the coordinated use of improvement philosophies and change management to solve business problems and for creating 2X to 10X increase in the bottom line of the enterprise.
He started working with Jindal Steel & Power Limited (JSPL) as a management consultant from September 2015. The breakthrough results and their significance in everything that he worked on, prompted the promoter to ask him to join the company as its CEO, which he did from January 2019.
As a leader in the unprecedented times that we are facing, what is your biggest worry?
I am not sure if I have a singular response to this gigantic question! There is so much uncertainty on all fronts and since it is “unprecedented”, any understanding of cause-and-effect does not exist. So my response is at three levels: I want to respond at an Indian Steel Industry level, India as a country level, and the global level.
From an Indian Steel Industry perspective, my biggest worry is about the return of truck drivers and labor (of project sites) back to work. We actually have no issues with the availability and inward logistics of the raw materials, so production is not an issue. And since the projects move in phases, progress within a phase (with consumption) gives rise to orders and so on and so forth. So for regaining the lost flow, both drivers and site labor are required.
Every industry has their own challenges, own approaches to address those challenges, and hence, own solutions as well. There is so much to learn and leverage with the inter-industry cross-pollination
My biggest worry at the national level is about food security, a famine. Not impacted by drought or lack of rains, but because of broken supply chain and damage to crops, especially the perishable ones.
And at the global level, the worries are on similar lines of poor logistical connection between the supplier and the consumer. We all have seen the impact of one “missing” domino in the chain reaction, and in today’s scenario, there are multiple missing dominos within the geographical distances between production and consumption sites.
We all have seen the impact of one “missing” domino in the chain reaction, and in today’s scenario there are multiple missing dominos within the geographical distances between production and consumption sites.
The Leadership Confidence Index report by Odgers Berndtson in association with Harvard Business Review Analytic Services states that ‘Only 15% of business executives worldwide have confidence in their own company’s top leadership to successfully manage disruption’. What are your views looking at the current scenario? Where do you think, the problem lies?
I am not surprised by the survey data. I think the problem is with the board and their selection process for the top job. Still, companies want to put an industry veteran in the top slot and have not learnt from the experiments of IBM kind, where they decided in favor of Louis Gerstner. In my view, the ability to innovate or think out-of-the-box would tremendously enhance if the top man or a few people in the top team are from other industries. Every industry has their own challenges, own approaches to address those challenges and hence, own solutions as well. There is so much to learn and leverage with the inter-industry cross-pollination.
The report states that the way forward is to either Adapt or Die. With the pace of change being a major source of disruption in itself, how is the role of leadership being redefined in the current situation?
I would say that the fundamentals of business would never change. In my view, a person “A” (or a company “abc”) gives money to a person “B” (or a company “xyz”), when the person “B” satisfies a NEED of person “A”; better the solution (satisfaction), more is the money; or higher the intensity of Need (pain/gain), more is the money! This is not changing, nor is it going to change. What is changing are the needs and the pace of change of needs. So the role of leadership needs to get aligned with these changes. And hence they need to spend more time and effort in understanding the customer needs and keep doing this on a high frequency.
Biggest change would be required in the design of capital intensive projects which typically have long gestation and pay-back periods. The trade-off would be between built-in flexibility in the design and the project costs.
How can leaders navigate the cash flow constraint with limited or no revenue streams, yet ensuring adequate capital to fall back on to minimize the impact on salaries?
In my view, the ultimate strength of any organization lies in its people. Laying off people appears to be an immediate, quick, and tempting solution. However, this can damage the organization very badly. The damage would obviously happen on the image and culture of the organization, but it also happens on the operational aspects when the fresh recruits take their own time and the remaining ones do not feel like giving their 100%. So, a better solution is to take a proportionate cut across the levels and manage the situation as a team. This approach has a far better probability of survival with a good ability to bounce back quickly. Needless to say, it will also have a positive impact on the whole organization and even the business associates on either side of the value chain.
As per the report, ‘humility’ is a key trait required by leaders to succeed in today’s time. Considering the fact that most leaders do not know how the industry growth scenario is going to play out, do you see a leadership style shift (from controlling to perhaps being humble)? Are there certain traits that can make leaders more effective in times of crisis?
“Respect” is my word or the “mantra” I like the most. And in my view, this is not going to change. As I said earlier, it is all about people. And when we talk about people, the biggest need does not lie in the once-a-month paycheque, or in the swanky office; people basically want to be respected. They want to be respected as human beings, respected for their intellect, respected for their skills and respected for being part of your team. And it must come naturally and genuinely from the leadership. I am okay with the leadership’s need to feel important, so long as they are also ready to acknowledge the importance of each and every member of the team.
What are your top three priorities at the moment? What would your advice be for leaders and the workforce at large as they learn to adapt to the new normal?
Cash, safety of our people and continuous feed of raw material to our blast furnaces and coke ovens are currently the top three priorities of mine. In a manner, all the three are about safety … company, people and plant.
My advice to the people would be to give their highest priority to their mental, emotional and physical health in these unprecedented trying times.