Leadership

In the class, you will come across a whole range of personalities – the silent, the arrogant, the super-intelligent, the vociferous, the subdued, and the life-of-the-party types. For many group activities, the Type A1 personalities [Friedman, M. & Rosenman, R. H. (1974). Type A Behavior and Your Heart. New York: Knopf.] invariably end up dominating the show and assuming leadership roles. But does that automatically mean they are good leaders? We can’t accept or dispute that without getting into the details on a case-by-case basis. Leadership can be considered as an amalgamation of many traits that are listed in this section. Consider each of them and evaluate for yourself if it is a quality that you already possess or if it is something you need to cultivate. If it is the former then the answer is clear. If it is the latter, then ask yourself if and how a business school degree can impart it to you.

Common Sense

A doctor comes for a routine check-up during visiting hours, while the patient’s family is still around. After testing the patient’s pulse, the doctor announces, ‘I’m sorry, but he’s dead.’ As the family members start crying, the patient gets up and says, ‘Guys! I’m still alive.’ In response, one family member retorts, ‘Shut up! Do you think you know more than the doctor?’

It’s an old joke that may not evoke any laughter, but it highlights a relevant point – our tendency to get so enamoured by data and technical details that we overlook the obvious. We think specialists have all the answers, just because they have been in the business for years. Business schools are good at providing fancy tools and techniques to solve problems. At the end of the MBA programme, for every strategic or technical problem, you would be able to rattle off various frameworks and methodologies that can be used. With so many tools under your belt, you will find it hard to acknowledge the fact that there was a world in existence before MBA programmes were started, a world with problems, and the horrifying thought that people would still tackle these problems without an MBA degree.

Control

This could mean many things in different contexts. In management lingo, this is closely linked to planning and refers to process control. It involves mon

It involves monitoring the process, ensuring that events are happening as planned and taking corrective action if there is any risk of derailing. But here we are not talking about operational or organizational control, but about the psychological aspects of control. In an organizational setting, too much of control can get you labelled as a control freak. And the other extreme can be equally damaging. A total lack of control can cause chaotic situations that may be difficult to reel in. Corrective action ends up utilizing far more resources than prevention and the proverbial stitch in time. A basic rule of thumb says too much flexibility is as bad as micro-management. But you will not come across any computer-generated simulation that will tell you how much control is good or bad.

Control could also be viewed in terms of emotions, especially negative ones such as anger and greed. Many of our personality traits are inherited or drilled into our psyche after years of conditioning. A shy MBA cannot transform into an extrovert at the end of the programme. An impatient student will not automatically learn the virtues of being patient. We talked about Type-A personalities. Most of them may be aware about the pitfalls of continuing to live a stressed lifestyle. However, many of their pre-wired features are so strongly ingrained in them that pure logic and reasoning aren’t sufficient to turn them around.

Practicality

Given unlimited resources and time, anything would seem possible. And in a classroom environment where there is little at stake, it isn’t too difficult to get carried away by hypothetical discussions and overestimate the efficacies of your newly gained skills. It is one thing to be able to provide convincing arguments and propose creative solutions to case studies. The only guys to resist and challenge your theories and solutions are your classmates and your professor. There are no legal implications, no employees demonstrating on the streets, and no country-specific regulatory constraints. Irrespective of how good or bad your recommendations are, there is no risk of losing money, competing firms gaining a foothold in your market, stock price plunging to never-before-seen depths, attrition rates shooting through the roof. In a case study, without batting an eyelid, you can coolly recommend laying off 2,000 employees to meet the cost-cutting goals of a company and still be able to go home and sleep peacefully without having to worry about the repercussions.

Creativity/ Innovation

Take any successful company and try to list down the top five things that make it special. And innovation will likely be one of these attributes. Innovation not just as it applies to high-technology products. Innovation in the company’s regular manufacturing process, quality assurance, customer interactions, human resource policies, incentive schemes, career growth opportunities. The rest of the industry calls these as best practices. For instance, the Toyota way of working has been documented, studied and copied by many other firms. In fact, it is highly likely that one or more of your case studies will focus around Toyota’s production system. But in spite of all this research by academicians and practitioners, other companies have found it difficult to match Toyota in the manufacturing area. This just means that the secret ingredient of innovation cannot be packaged in capsule format and gulped down in classroom sessions.

Judgement

Private equity (PE) funds raise huge amounts of money so that they can invest in companies that have a substantial growth potential. PE funds are managed by very small teams and are extremely selective in their hiring. Check out the online profiles of some of these funds. Focus on their qualifications. Almost all top-tier PE funds have super-achieving MBAs on their rolls. Given the size of their investment funds and the number of companies across the globe, you would assume there is no paucity of right opportunities to invest. But despite the background work of screening companies and the number-crunching, most investments do not yield the returns that were initially estimated. The best case/ worst case modelling that we talked about earlier gets pretty complex here. But none of the MBA techniques can guarantee that the fund will make a killing on 100 per cent of its investments. At the end of the day, it is a judgement call made by the managing partners of the fund.

Foresight

Consider the case of top-tier investment banks. They recruit some of the best minds in the world at obscene salaries. They have access to the best databases with cutting-edge information, the best analytical tools, the best processes and the best contacts in the business. Almost all of these banks have sophisticated risk-management systems and trained personnel to use them.

Management information systems implemented by various departments carry out in-depth analysis and churn out comprehensive reports that can be used by senior management teams to evaluate impact and take corrective actions if required.

And yet, most of them had no inkling about the sub-prime crisis that hit them in 2008. Many had to write off multibillion dollars of bad debts. Out of the thousands of super-bright MBAs that these investments banks have on their payrolls, even if a handful had the raised the alarm bells in advance and convinced their managements to sit up and take notice, could the magnitude of damage have been controlled? Or were the short-term rewards so overwhelmingly attractive that the few alarm bells that did get raised meet with a swift painless death? Well, your guess is as good as mine.

Decision Making

We talked about judgement earlier. Decision making depends on it and both go hand in hand. Ever looked out of the window at clear skies and decided that you’d still carry an umbrella? That would be decision making at its simplest. In your mind, you subconsciously digested all the relevant information and came up with a probable outcome, that is, the possibility of rains in the next one hour appears to be low. But considering that you were in the middle of the rainy season, you discarded all that subconscious processing and insisted on carrying an umbrella. This has a lot to do with gut-feel.

Whether you are an employee working in a big corporate environment or an entrepreneur running your own show, you will come across situations where you have to make decisions. In early years of the career, there is little experience to fall back on and most decision making follows a more objective and theoretical route. Which is why, the criticality of decisions mirrors the organizational hierarchy. The senior managers make the more critical decisions. The theory, concepts and tools that the top manager works with are not too different from those used by the freshly minted MBA. So why is there this disparity? The answer lies in the grey hair, not just grey matter.

Interpersonal Skills/ Relationship Management

Many important business deals are made in informal settings, across coffee tables, on golf courses, during unplanned lunches. Products and services are rapidly getting commoditized across industries.

In the wealth management industry, a commonly used term that triggers salivating mechanisms within the wealth management community is High Net Worth Individuals (HNWI or HNI). These are ultra-rich customers who apparently own private money-minting factories, but have no inkling of what they can do with their money. Or they may just not have the aptitude or the time to do it themselves. Wealth managers help them take their investment decisions. As wealth managers move from one financial institution to another, they take with them several loyal HNIs. Business development, marketing, sales are all examples of external customer-facing functions that depend heavily on relationships to keep the company in business.

Even if you are not in an external interfacing role, interpersonal skills are still hugely relevant. Attrition is a big problem for many organizations. During exit interviews, apart from expected reasons such as money and better prospects, many employees site their difficult bosses as a key reason for moving on. This does not come as a surprise as corporate folks spend more time with their bosses and colleagues than with their spouses, family and friends.

Real Life Experience

The school of hard knocks, as they call it. Case studies in B-schools can only provide snippets from a CEO’s diary. Though they are often based on real cases and data, we have to consider the constraints of these. How much detail can one fill into thirty-odd pages of text and graphics? All the emotions that cloud the mind, the anxiety that precedes the decision-making process, the sleepless nights weighing the pros and cons of each option, the stress of meeting expectations of stakeholders and the fear of failing. An MBA who goes through so much of mental and physical toil while cracking competitive exams like XAT or any other such exam, sitting in the class feels none of this.

Negotiation Skills

If I say that barring a few things such as ethics, basic values, principles (think of others that fit the bill), most things in life are negotiable, would you think I’m stretching it a little too much? Right from childhood, we try to negotiate our way into the world. For most of us, our negotiation techniques have evolved over time. And we have learnt the right way from the wrong way, by practising, by messing up one too many times. Our initial efforts may not have been super-effective. But we have learnt from our mistakes. We have observed and realized that what works for others may not work for us and that there is no right way to negotiate. You will continue to use these skills in B-school and in your new job.

In class you will hear terms such as win-win approach, mediation, arbitration and BATNA (Best Alternative to a Negotiated Agreement).

Companies often use the services of professional negotiators to resolve disputes. If issues could be resolved amicably between two parties (that employ an army of MBAs who’ve taken up the ‘Negotiation skills’ elective), there would have been no need to get a third party involved.

Emotional Intelligence

Daniel Goleman popularized this concept. But if heavy technical words scare you, we can go with the less scary equivalent – maturity – though it does not entirely capture the essence of Goleman’s concept. Proponents of this theory say Emotional Intelligence Quotient (EQ) can be more important than Intelligence Quotient (IQ). The four basic capabilities involve recognizing emotions, analyzing them, using them appropriately and regulating them in such a way that the end objective is attained. Many organizations incorporate psychometric tests in their recruitment process in an attempt to delve into the minds and gain a better understanding of how the individual may react in various situations and predict behaviour. Again this is one of those areas that’s hard-wired into each of us. With training and practice we can try to gain awareness and control on our emotions (heard of anger management sessions?) and consequently influence our behaviour.

The primary message that this chapter tries to convey is that there are several skills that can be compensated for by managers with commonly adopted approaches such as delegation and outsourcing. However, certain skills, especially at senior levels, cannot be compromised. These are the attributes that actually separate the professionals from the masses in the business world. And many of them cannot be transferred in a classroom setting to those that lack the aptitude. Those who possess the aptitude can pick up and polish these skills over time in their regular work environment without having to sacrifice their jobs for them.