I wrote the following essay for a competition at business school. Sadly, I didn’t win, but I’m going to publish it anyway, as a record of my progress in essay writing.
Achieving Sustainable Success
For any organisation to succeed, it needs great leadership at all levels within. To create an organisation which can sustain success over a long period of time, leaders in each generation need to lay and reinforce the foundations which underpin a successful organisation. This essay attempts to describe the things leaders should be doing to enable their organisation to achieve sustainable success.
Every organisation needs a vision. It should be forward looking and aspirational. Something that inspires the people who make up the organisation. It should be embedded into their DNA, and make them spring out of bed in the morning, eager to realise that vision. The pace of change in the modern world is fast and relentless. Each new innovation accelerates the cycle of change, and the only way a business can succeed is by riding the waves of change with the vision acting as a pole star for its people.
It is imperative for the success of any organisation that a culture of openness is created and nurtured. Openness primarily in the way the employees are treated. It has become a familiar sight across organisations where performance reviews are either merely a formality or are simply ambiguous. Even worse, these review systems seem to keep ‘evolving’ every 12-18 months for reasons best known to the people who maintain them. Most departments are required to show a normalised distribution, where there are a few top achievers, a few underperformers and the rest of the staff being “strong performers”. There is usually a “The Best” or “Totally Uber Outstanding” grade as a possible outcome for performance reviews, but no one can explain to an employee how such a grade can be attained. This creates cynicism and develops a culture of disengagement. People are an organisation’s most important asset, and all too often people are treated badly or unfairly for no apparent reason. The success of an organisation, and its people, is best achieved when their goals are aligned. It is therefore imperative that leaders prioritise people management to try and achieve this happy medium.
People care about things which they own. If it is a process that people have to follow, they should have the opportunity to contribute to the development of the process. People should be allowed to have a say in the choice of tools that are used to do their jobs. All too often we hear the lament from people about how long their corporate laptop takes to boot up in the morning, or how nonsensical the process for claiming expenses is. Millions of hours of employee time is wasted each year in large organisations because overarching decisions are made by people who are far removed from the impact of their decision making. Employees should also be given a stake in the business, and rewarded appropriately for their level of output. Doing this in a fair manner is quite hard, but is also very important. People become disengaged from their work if they feel that they are being exploited.
Leadership is required at all levels
In the article “Management is (still) not Leadership” by John Kotter (Harvard Business Review blog, 9th Jan 2013, (http://blogs.hbr.org/kotter/2013/01/management-is-still-not-leadership.html), he argues that leadership is required at all levels in an organisation, not just at the top. All too often, management is mistaken for leadership whereas these two are completely different. It is vital that this insight is firmly rooted within an organisation, and everyone knows that they are expected to demonstrate leadership in their daily jobs. Unless this is done, there is the danger that people always look to their managers for leadership, instead of using their own initiative and creativity to find solutions to issues they are facing.
Failure is progress
Lot of businesses talk about the importance of innovation, but very few actually put in place the support structures needed for innovation to thrive. Human beings are naturally curious and inquisitive, and ideas are followed through only when there is no fear of failure. Checks and balances are obviously required to prevent excessive risk taking, and as long as people understand the boundaries within which they have to operate, they should be allowed to try out new ideas and take calculated risks without fear of rebuke or ridicule. Some great examples of organisations where this culture is widely prevalent are 3M and Google. Both companies allow employees to spend a certain amount of their time at work trying out new ideas. 3M allowed its employees to spend up to 15% of their paid time trying out new ideas (http://solutions.3m.com/innovation/en_US/stories/time-to-think). One such employee created the PostIt note. Google allows its employees to spend up to 20% of their time working on things not related to their job description (http://googleblog.blogspot.co.uk/2006/05/googles-20-percent-time-in-action.html). While these kind of policies are undoubtedly hard to create and manage, past experience shows that they can be incredibly rewarding. This is understandable, because people work harder on ideas they have come up with.
Live the message
Leaders need to overtly demonstrate that they are living the message they are trying to spread. As an extreme example, a CEO exhorting employees to observe fiscal discipline should not be travelling in a private jet! In fact, in times of hardship, leaders should take a bigger share of the pain, rather than asking lower paid employees to accept big cuts to their benefits.
Establish a succession plan
Almost no one is indispensable in large organisations. While this may be largely true, for an organisation to achieve sustainable success, it needs to establish a succession plan for its leaders. Talent within the organisation should be identified and nurtured so that there is an orderly transition from the old to the new at the appropriate time.
Hire the right people
If people are the most important asset of an organisation, and indeed they are, it is vital that the hiring process is taken very seriously. Employees should be encouraged to hire people who fit with the vision and culture of the organisation. It is sometimes better not to fill a position, rather than filling it someone unsuitable. This can only work well if people are given the time and space required to find the right candidates, and it is an activity which cannot be outsourced. A good example of a business where the hiring process is central to its functioning is Valve
(http://www.valvesoftware.com). Their handbook, available at http://assets.sbnation.com/assets/1074301/Valve_Handbook_LowRes.pdf, describes the way people work within the business, and provides an example of how a business can succeed in an unconventional manner.
In an increasingly heterogeneous world, it is important that the people who are part of an organisation reflect the society it is serving. Diversity brings with it various challenges, but also immense benefits. People of different cultures, nationalities, and genders bring with them different perspectives which are very important in a complex decision making process. Homogeneity brings with it a one sided view of the world which can lead to bias in decision making, and stifle an organisation’s ability to develop plans that remain distinct or competitive in a rapidly changing business environment.
Establish internal communication channels
Internal communication is key to the success of an organisation. An organisation is similar to complex machine. The machine can only work efficiently if all the components are functioning in sync with each other. So leaders of an organisation should establish channels of communication which ensure the smooth flow of information. One could also look at the role of leaders within an organisation as the role of adults in raising a child. Good communication is necessary between all adults involved to create a healthy environment for the child to gown up in.
An organisation does not exist in isolation. It can only exist by having a symbiotic relationship with the society it serves. Leaders of an organisation should always be mindful of this relationship, and enshrine ethics into their core principles. Profit making is not unethical, but chasing profits in a way which is detrimental to society is short sighted and ultimately self defeating. History is littered with the corpses of businesses where ethics took a back seat. Examples are Enron (http://news.bbc.co.uk/1/hi/business/1780075.stm), Arthur Andersen (http://news.bbc.co.uk/1/hi/business/2047122.stm), Satyam Computers (http://news.bbc.co.uk/1/hi/business/7818220.stm).
I have not mentioned any of the technical aspects of a business, such as an effective operations strategy, a brilliant marketing strategy or an efficient sales strategy which are hygiene factors for success. All these technical aspects will contribute to the success of a business, but to achieve sustainable success, leaders need to invest time and effort in the ‘softer’ aspects of a business, which I have tried to describe in this essay.
BBC News (15 Jun 2002) Andersen guilty in Enron case, [Online],
Available: http://news.bbc.co.uk/1/hi/business/2047122.stm [28 Mar 2013]
BBC News (22 Aug 2002) Enron scandal ataglance, [Online],
Available: http://news.bbc.co.uk/1/hi/business/1780075.stm [28 Mar 2013]
Kotter, John. (9 Jan 2013) Management Is (still) Not Leadership, [Online],
Available: http://blogs.hbr.org/kotter/2013/01/management-is-still-not-leadership.html [28 Mar 2013]
K, Alex. (18 May 2006) Google’s “20 percent time” in action, [Online],
Available: http://googleblog.blogspot.co.uk/2006/05/googles-20-percent-time-in-action.html [28 Mar 2013]
Vaswani, Karishma (8 Jan 2009) Satyam scandal shocks India, [Online],
Available: http://news.bbc.co.uk/1/hi/business/7818220.stm [28 Mar 2013]
(2012), Valve handbook, [Online],
Available: http://assets.sbnation.com/assets/1074301/Valve_Handbook_LowRes.pdf [29 Mar 2013]