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Tuesday, June 25, 2013 behind the tools make all the difference!

In January 1993, Kodak—whose earnings and stock price had been languishing—hired Christopher J. Steffen to help turn around the company, for he was looked at as the White Knight Chief Financial Officer who could save stodgy Kodak.
Investors applauded his publicized hiring. The company’s stock price moved north in the days that followed his hiring adding more than 3 billion US dollars to the company’s value. However, owing to a dispute with the Chief Executive, the 3 billion dollar man resigned 90 days later. Investors dumped Kodak shares within no time, pulling down its value to 1.3 billion dollars.
What it tells? It says: A single person can add or subtract billions of dollars to/or from the company’s fortunes. Why that far, in our own backyard, Infosys had recently recalled the services of Narayana Murthy to revive its fortune. What does all this mean?
It simply means: Yes, there are well-designed systems to scout market for business opportunities, risk identification and models to manage it, strategies to augment profits, and yet they are all found to become functional in the hands of some and some only—institutions become living, customers start pouring in and profits move northwards only in the hands of a select few.

Now the question is: Who are these select few? What is so special about them? The answer is: They are Leaders. They command following by:
  • being visionary
  • showing confidence in self and others
  • communicating high performance expectations and standards
  • personally exemplifying the firm’s vision, values and standards
  • assessing the extent to which the company faces environments that are dynamic, risky and uncertain and
  • demonstrating personal sacrifice, determination, persistence and courage to counter them.
Can we all then become leaders? Yes, we can and we need to. But, leadership qualities being contingent on circumstances, one has to fashion one’s own path. Nevertheless, there are certain overlying unique set of qualities that are found to be serving leadership well.

To start with, let us try to understand the concept of power. The moment one is appointed as Chief Executive of a company he/she inherits power from 3 sources:

 Power of the Office - acquired on taking the job
  • Power to reward: hire, praise, promote and raise
  • Power to punish: criticize, reassign, demote and fire
  • Power of authority: approve, sign-off, disapprove
Power of the person - brought to or developed on the job
  • Power of expertise: knowledge, information, experience
  • Power of character: integrity, charisma, expectations
Power of the transformed organization - created on the job
  • Power of empowerment: delegate, authorize, make accountable
  • Power of reorganization: redesign, restructure, re-engineer
The powers of office constitute the organization’s authority vested on the appointee and their effective execution is the domain of good management. But, building beyond the powers received on taking the office is the one that takes an individual to the terrain of good leadership. Effective application of one’s personal power is akin to what we often think of as individual leadership. The rhetorical skills of Mahatma Gandhi or Nehru come to our mind.

Researchers have precisely defined that certain personal traits enhance an individual’s leadership effectiveness and they are:
  • Challenging the process
  • Searching for opportunities
  • Experimenting
  • Inspiring a shared vision
  • Envisioning a future
  • Enlisting others
  • Enabling others to act
  • Strengthening others
  • Fostering collaboration
  • Modeling the way
  • Setting an example
  • Celebrating accomplishments
  • Recognizing contributions
David A. Nadler and Michael L. Tushman have recommended another set of generic elements of effective personal leadership:
  • Envisioning
  • Articulating a compelling vision
  • Setting high expectation
  • Modelling consistent behavior
  • Energizing
  • Demonstrating personal excitement
  • Expressing personal confidence
  • Seeking, finding and using success
  • Enabling
  • Expressing personal support
  • Empathizing with others
  • Expressing confidence in people
Leadership alone can transform the decision-making system into one of delegated responsibility and accountability. Research studies confirm that empowered subordinates are more likely to devolve authority, share information, train and mentor their own subordinates and provide greater latitude and autonomy within their operations.

It is creation of such culture within the organization and the ability of a leader to command the loyalty of his workforce through his impressionistic articulation about envisioned future which could ultimately deliver the results.


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