A wave of shame and disgrace washed over Indian Premier League’s (IPL) Rajasthan Royals team. Three players of the team – S Sreesanth, Ajit Chandila and Ankeet Chavan – were identified as part of the spot fixing racket. Eleven bookies were involved. Investigators have found some evidence connecting it to underworld don Dawood Ibrahim.
As per police disclosure Chavan was paid Rs.60 lakhs by the bookies, Sreesanth and Chandila got Rs.40 lakhs each. By the number of matches they have played they would have earned a few crores each. The bookies lured the players by throwing parties and providing female escorts.
It is shocking that players with such international repute and excellent career opportunities would take a criminal route to earn money. One wonders what they were thinking. Were they joyously throwing up their hands in the air and dancing with happiness. Did they think that for a few millions they would be breaking the hearts, trust and expectations of billions of people, starting with their family?
It is reported that Rahul Dravid, the captain of the team suspected something. He made Sreesanth sit a couple of matches and the team managers asked him to leave the team. How painful it must have been for Dravid, a man reputed for gentlemanly conduct.
This isn’t the first time followers hearts have been broken by their idols. It started with the political leaders. Now the cancer has spread through all facets of life. Indian politicians – Gandhi, Nehru, and Azad – were known for their impeccable behavior Congress leaders fought for Indian independence. They spent years behind bars to fight for a cause. Now Indian politicians spend time behind bars for corruption and fraud. Instead of feeling shame or humiliation, they get back into public life with renewed vigor to mislead people and make money. Over 30% of Indian politicians have a criminal track record.
The new breed, who have joined the infamous bandwagon are senior managers of Indian corporates. After Satyam and 2G telecom scam, their names appear frequently for being interrogated by CBI and spending time in jails.
Valuing Honor in Our Lives
So where has honor disappeared? Previously, the mark of distinction for a man was when people referred to him as – “he is an honorable man”. Having a dishonorable reputation was disastrous socially and professionally. Now, honorable men among leaders can be counted on figure tips.
As a world civilization, we need honor back in our bloodstream. Without it, humanity will reach new levels of depravity. We require men and women to work dedicatedly to get it back for the sake of next generation, though it is a challenging task.
The cynics will say it is a pipe dream and point out various flaws. The idealists look at the times gone by and wish the same could somehow come back. The practical breed has learnt to work like an automaton to earn a living and look at nothing else.
So where do we get our heroes who will change the world for us? The heroes have to pay a price. Lincoln, Gandhi and King – were all assassinated because they dared to bring about change. From the first step to the end of their journey they made personal sacrifices. They repeatedly saw failures, their hearts sank with despair and somehow they gathered their strength to walk on thorns again.
In the present world, who would wish to trade the high life, luxuries and comforts for a life full of dynamite?
But unless we do so, we are bestowing the next generation a dangerous life.
So our choice is between our generation and the next. Do we want to look that far ahead?
When we talk about change, our hackles rise. Even when it is obvious that we should change, we don’t want to. That is a human failing which 100% of us have. Our best excuse is that we can’t change the world, who would listen to us, how can all the people change? But if we study change, we just need 10% of the people to believe in our cause. That is, we need to influence just 1 in 10 people in our life. That doesn’t sound very difficult; all of us are capable of doing it. So why not give it a shot, and bring honor back in our lives. I leave you with words of Dorothy L. Sayers from Gaudy Night:
“If it ever occurs to people to value the honor of the mind equally with the honor of the body, we shall get a social revolution of a quite unparalleled sort.”
In April, two Air India pilots handed over the controls in auto-pilot mode to two female cabin attendants to take a short nap. They decided that their sleep was more important at 33,000 feet while flying the 160-passenger flight from Bangkok to Delhi. They returned to the cockpit after 40 minutes when one of the cabin attendants accidently knocked off the auto-pilot mode.
The angry Twitterate asked for pilot’s license suspension, removal from job and legal charges for culpable homicide. Everyone questioned their work ethics and shock at their irresponsible behavior. Air India investigated the incident, suspended the pilots and sated that passengers’ safety was never compromised. Unbelievable, how can passengers be safe without any pilots at the helm?
1. Double Standards in Evaluating Corporate Leaders
The pilots were crucified for risking the lives of passengers. However, surprisingly the pilots of the corporate world do not suffer the same fate. The wizards and titans of the banking industry crash landed the world economy, but they didn’t lose their CXO seats.
Look from another lens. Did any senior in Supplier Company or the multinationals lose their job in the Bangladesh factory fire? In Foxconn, the Apple contractor, 11 employees committed suicide, four died in an accident and one collapsed after continuously working for 36 hours. However, Steve Jobs was rated as the second most popular leader by the CEOs in a survey conducted by Price Waterhouse Coopers. The first and third were Winston Churchill and Mahatma Gandhi respectively.
Now this is going to rattle my readers but let me say it. Steve Jobs was a great inventor, designer, strategist and marketer. However, when it came to people, his employees considered him rude and manipulative, and his competitors found him uncivil. Though Apple achieved great heights, he paid low salaries to the employees in the Apple stores, paid no dividends to the shareholders, pushed down suppliers to manufacture at lowest possible rate and didn’t believe in charity or corporate social responsibility. His behavior and actions weren’t people centric or humanity oriented. So my question is – do we consider him a great leader because he managed to put Apple on top? That makes him a great CEO, not necessarily a great leader.
2. Misconceptions of Leadership
The problem arises due to the definition of leadership. Read the dictionary meaning:
Leadership is “organizing a group of people to achieve a common goal”.
- We don’t focus on how the group of people were gathered; by inspiring them or arm-twisting them.
- We don’t focus on the nobility of the goal; was it to exploit others or liberate them.
- We don’t focus on the method adopted to achieve the goal; was it by breaking the rules or a journey of virtue.
In the present world we see leaders leaving dead bodies in their path, walking over people as if they were stones and sucking the life out of them. Great leaders create leaders not followers, they make others blossom like flowers.
Be it a corporate leader or political leader, we don’t wish to question the leadership methods. Our thinking is, how it matters to us, we have nothing to lose. We have everything to lose, and Martin-Niemöller-Foundation words at Hitler’s time still resonate:
“First they came for the communists,
and I didn’t speak out because I wasn’t a communist.
Then they came for the socialists,
and I didn’t speak out because I wasn’t a socialist.
Then they came for the trade unionists,
and I didn’t speak out because I wasn’t a trade unionist.
Then they came for me,
and there was no one left to speak for me.”
Our own silence will kill us and the society we live in. When humanity is at stake, can we close our eyes and say nothing is at stake.
3. Leadership Training
The Institute of Strategic Change reported that – “the stock price of ‘well-led‘ companies grew by over 900% over 10 years, compared with 74% for poorly led companies”. Warren Bennis in 1998 said – “The Truth is that no one factor makes a company admirable. But if you were forced to pick the one that makes the most difference, you’d pick leadership.” However, how many companies train on leadership or do a performance evaluation on leadership qualities?
Quite a few would be saying we do it. So let me clarify. In organizations bosses tell the juniors what to do and how to do it. They give rave reviews to the employee who completes the task as they had stated. They promote that employee and now he becomes a boss. At best, he will be a good manager, not a leader.
Corporate world determines success rate by title and salary. Neither guarantees leadership skills. Employees aim to become a boss, not a leader. The terms are not synonyms.
According to Malcolm Gladwell, all outliers practiced their talent for over 10,000 hours to achieve greatness. In the corporate world, how many hours are dedicated by each employee to learn leadership? Learning leadership is a by-product of the main job, till CEO level. Then isn’t it surprising that we do not have many great leaders in the corporate world.
Maximum damage in the world was caused by people who got powerful positions without good leadership qualities, be it Hitler, Jeff Skilling, Bernie Madoff or Lance Armstrong. The biggest risks in the corporate world are leadership risks. It is the leaders who make the decisions, so unless we have a system of putting the right people in leadership positions we will continue to have these disasters. Hence, our job is to develop good leaders, select good leaders and continuously monitor the leaders.
Wishing my readers a Happy Mother’s Day. Being parents is the toughest job in the world,. They are responsible for raising the next generation of leaders.
We Indians jokingly refer arriving late for a meeting as arriving ISD (Indian Standard Time). However, if you, my reader, are an Indian, you would have heard a question from a western colleague – “Why are Indians late for meetings?” If you are a westerner, you desperately want to know the answer to bring your stress down and figure out whether the Indians actually want to do business with you. However, whether you are an Indian or a westerner, have you ever thought of Indian attitude to time as a strength in the future chaotic world?
Let me delve into a little bit of detail before I answer that. The attitude towards time divides people into two cultures – monochronic people and polychronic people. According to Wikipedia the definitions are:
Monochronic – A monochronic time system, people do things one at a time and segment time into precise, small units. Under this system, time is scheduled, arranged and managed.
Polychronic – In polychronic time system, people do several things simultaneously, and take a more fluid approach to scheduling time.
Indians follow the polychronic time system whereas most of the western countries believe in monochronic time systems. The general perception is that people following monochronic time system are better organized. Hence, monochronic system is superior.
1. Attributes of the two cultures
Below is a table of attributes the people of two cultures show with the current business buzzwords and applicability to Indians. Check it out and tell me whether Indians attitude towards time is going to be strength in future?
Applicability to Indians
Do one thing at a time
Do many things at once
Single task v/s Multitasking
Concentrate on the job
Can be easily distracted and manage interruptions well
Advancement in technology and telecommunications has globally connected the world with little segregation possible in work and home life. Managers do multiple tasks now and Gen Y are mentally geared to do so from childhood.
Advantage – India: Indians traditionally do multiple tasks and have a huge population of Gen Y.
b) Effect of globalization
Globalization and outsourcing has ensured that managers are not physically available on site to monitor tasks. Secondly, work-life balance is encouraging more people to work from home. Hence, success depends on delivering results and not on completing tasks.
Advantage – India: Indians do not have mindset for process adherence and adopt flexible approaches to achieve targets.
3) Influence of social networking
In the age of social networking, communication is taking center stage. Senior managers face the challenge of communicating with a global workforce of different cultures.
Advantage - India: Indian communication style is subtle, layered and non-aggressive.
4) Demands due to complexity of business
The space of change in the world has increased due to technology and globalization. The business environment has become complex and chaotic. The long-term planning is not possible because parameters change in a short time.
Advantage – India: Indians managers are used to dealing with adversity and chaos. They are comfortable working delivering results with minimum infrastructure and support.
Advantage – India: Indians believe in long-term relationships even in business. They conduct business after establishing trust and respect in the relationship.
I do not know whether I am on the right track. Nevertheless, in my opinion we definitely need to relook, as the risks are high. For instance, presently the western organizations are developing their organization structure, processes and framework according to monochronic thinking. On the other hand, as the business environment requires polychronic behaviour, there is going to be clash in the system. Employees will be confused and unnecessary conflicts will occur. That results only in one thing – lower profits and higher risks.
In Indian organizations, we need to be clear that we do not adopt behavior patterns and change the culture according to our perceptions. We need data and analysis to assess the culture that will be suitable in future. It is possible, that a polychronic culture is better.
My last post on Indian Management Model generated a common comment – “India already has a management model where obedience to the boss comes first!” That is the common perception so I decided to delve deeper into the subject. Where did the authoritarian style of leadership come from in India?
The common perception of modern day CEO was that a CEO had all the answers. He was all knowing same as the prior period kings. In this century, the management mantra is that CEOs don’t have all the answers and should have the ability to ask the right questions. They need inputs from all to form decisions. Therefore, the shift clearly is towards participative leadership style.
After some research, I found that authoritarian leadership style originated from the Greek terminology “autocratic leadership”. My view is that Indian history is full of examples of participative leadership. Let me explain this viewpoint further.
In Ramayana, the main characters considered obedience a virtue. However, Buddha propagated the view – question everything, don’t take anything at face value. Subsequently Mahabharata is full of characters doing exactly as they please, breaking all the rules and getting into a lot of trouble. In it, Krishna asks Arujuna to fight his teacher Dronacharya, his elders, most of his relatives and friends since they were supporting unethical Dhurypdhana.
Further, Kautilya’s Arthshastra gives a full process for the king to take decisions after consulting his ministers, officials and public where required. He discussed participative leadership in 4th century BC. Surprised! Let me share his thoughts with you.
1. Discuss with ministers and employees
The king shall deliberate over matters with a number of people as required. It states that “No deliberation made by a single person will be successful; the nature of the work which a sovereign has to do is to be inferred from the consideration of both the visible and invisible causes.”
2. Obtain outside counsel
It further mentions that discussions should not be restricted to ministers and their direct reports. The king “shall sit at deliberation with persons of wide intellect.” Hence, it discusses the concept of consultation from people outside the ministry.
3. Encourage constructive confrontation
Next, the Arthshastra mentions that the king should hear all opinions even contrary to his. It states – “He shall despise none, but hear the opinions of all. A wise man shall make use of even a child’s sensible utterance.”
4. Selection of advisers
Then Arthshastra states that king should not select people on a random basis or those who have no clear idea of the execution of work required. It states -“He shall consult such persons as are believed to be capable of giving decisive opinion regarding those works about which he seeks for advice”. Hence, qualification and knowledge of advisers is a prerequisite.
5. Opinions of competitors
Kautilya does not suggest that advice should be sought from friends and allies alone. He states – “nor shall he (king) sit long at consultation with those whose parties he intends to hurt.” Hence, getting competitive information and viewpoints hasn’t been ruled out.
6. Number of advisers
Kautilya advises that in the normal course of business the king should discuss with 3-4 ministers. He states that discussing with one minister is useless, as he will advise “ willfully and without restraint”. Discussing with two would not help as “the king may be overpowered by their combined action, or imperiled by their mutual dissension”. Discussing with too many minsters will cause a great deal of trouble and slow down the process. I think Kautilya has adequately covered modern day challenges of selecting advisers.
7. Method of discussion
Last but not the least, Kautilya defines that the king should choose to hold a collective meeting or individual interactions depending on the situation. In his words – “The king may ask his ministers for their opinion either individually or collectively, and ascertain their ability by judging over the reasons they assign for their opinions.”
Kautiliya comprehensively covered most of the aspects of participative leadership in his Arthshastra. Authoritarian leadership appears a western concept and not an Indian concept as is commonly believed. The style took major hold during industrial revolution. With globalization and increasing complexity of business, participative leadership is gaining ground. Concepts of collective intelligence and crowd sourcing are garnering strength.
Moreover, the main concept of Hinduism is – everything that is created is destroyed and everything that is destroyed is recreated. If it is true, then history repeats itself. Then isn’t it better to understand the historic management concepts and learn from them.
Lastly, in the creation of new world order, nothing is sacrosanct. In words of Jalaluddin Rumi – Don’t be satisfied with stories, how things have gone with others. Unfold your own truth.
I am asking my readers - Have you heard about the Indian Management Model. If not, then why not? India has a rich history of baniyas (business community) who excelled in trade. India controlled one-third to one-fourth of the world wealth in the classical period (1AD to 1279 AD). So why do we not have Indian management principles?
Indian business schools and colleges teach management concepts formulated by Peter Drucker and Fredrick Taylor. Granted America had a dramatic and glorious history of business growth. However, presently the media headlines proclaim just one thing – American business environment sucks! Indians have made great strides in adopting the American money market principles but shouldn’t we stop and redefine them.
Indians managers may think it is not possible, but Bollywood has taught us it is possible. Yeah, Bollywood has chosen the best of both worlds. Aamir Khan’s Lagaan reached the Oscars with dirty dhoti clad Indians singing, dancing, and playing cricket. Even Danny Boyle’s Slumdog Millionaire had a song and dance sequence. Bollywood movies contain high-octane emotional drama, no-brainer jokes, head over heels in love stories, superman fight sequences, songs and dances. Bollywood adopted the Hollywood technology, marketing and financing strategy, and retained the cultural core of Indian cinema. It presented itself to the world in various award functions without attempting to incorporate Hollywood sensibilities and tastes. It is now so popular that even US dance reality shows have with Ballad and Hip Hop, Bollywood dance form.
We need to do the same with Indian management rather than blindly adopting western best practices. Below are some of my rather radical thoughts on how we can do it. Read it and tell me what you think.
1. Holistic Business
The stupendous success of American capitalism in 20th century resulted in making the money market model popular. India initially after independence followed socialistic model but after liberalization in 1990s is foraying into hard-core capitalism.
Now, after witnessing the pitfalls American business concept is undergoing change. More and more people are questioning the basic premise that business is for profit alone. People are propagating that business has responsibility to all its stakeholders – investors, customers, employees, suppliers and society. It cannot profit while harming the society.
From ancient times, India propagated the concepts of holistic business. The stories in Indian history repeat the same message. A businessman is required to conduct business ethically and responsibly and has to give back to the society. Unlike the west, Indian philosophy focuses on balanced life and not the concept that more is better.
Hence, while the west was struggling with high CEO salaries, until recently, India was not having this problem. The Indian CEOs salary increases have occurred in the last 6-7 years. While the western public is protesting against these high salaries, Indians are acquiring the bad habit. The Indian business leaders need to look what they are copying from the western world under the guise of management nuggets, best practices and benchmarks.
2. Non-violent Competition
Once a friend remarked – “You quote Mahatma Gandhi and profess to be a follower of non-violence principles, but you are always fighting”.
I responded – “When was Gandhi ji not fighting? He fought the British Empire for half his life. He just did it non-violently. He based his fight on humane principles and values.”
We need to introduce the concept of non-violent competition in the business world. The financial crises in the west showed that cut throat completion, aka dog eat dog world results in organizations with dysfunctional cultures. The banking regulators’ reports prove it.
Indian principles of non-violence (ahimsa) state – “do not harm anyone”. It does not say – “do not excel”. Indian business leaders must focus on achieving great heights based on knowledge, ideas, innovation and strategy. They must not focus on running down their competitors through industrial espionage, illegal acts or negative publicity.
The same applies to Indian employees. Excel on merit and not by creating misfortunes for your colleagues.
One thought to keep is – Non-violence and success aren’t two mutually exclusive terms.
3. Teach Ethics Through Indian Philosophy
When I started blogging, an American blogger gave me feedback on one of my articles – Buddhism in Corporate Life. He said that in US they don’t mix religion with business ethics. Though I understood his point, I couldn’t see how Indians could adopt it. In India, religion is entwined with Indian philosophy in every aspect of life. The values and attitudes of a country’s population define its culture. We cannot segregate business ethics from the whole piece and teach it in isolation.
The pujas, fasts and festivals of various religions of Indian sub-continent would account for 300 days in a year. There is a moral story behind the folk tales of numerous gods and goddesses. The western world is now talking about “storytelling” to give messages and sell concepts. The Indian mythology did just that. Then why not use it to educate on business ethics?
Let me put it another way. How many Indians would know the Utilitarian Approach of Jeremy Bentham and John Stuart Mill or the Rights Approach of Immanuel Kant? My guess is less than 5%.
Which ethics philosophy would be easier to sell to Indians? The one they are familiar with, and connect at emotional and psychological level.
Unfortunately, in India political parties create a ruckus whenever Indian concepts are included in the school course syllabus stating it is favouring some religious group. They don’t object to the introduction of western concepts. We need to stop being apologetic about Indian heritage and proudly learn from it.
4. Inclusive Workforce
The term “Diversity Management” sends one clear message – “You were not welcome and we are doing you a favour by inviting you”. It applies to women, LGBT group and minorities.
In the last few years, LGBT rights have taken centre stage in the western world. Let me touch a bit of Indian history. The British in 1862, introduced section 377 of Indian Penal Code prohibiting homosexual activity as British soldiers had sex in the ships travelling to India.
Before British rule, Indians accepted homosexuality without aversion. Homosexuals were not considered inferior or abnormal. In Hinduism context, every person has a masculine and feminine side and the percentages vary in each human. No one is completely male or female. Hence, some pictures depict gods in the conjoined half-male half-female form.
My guess after reading the Da Vinci code is that Christianity propagated the concept of women being inferior to men. Before the Moghul rule in India, Indian women enjoyed equal rights. Hindus pray to their gods along with their soul mates – Ram- Sita, Krishna- Radha, and Shiv-Parvati. Goddesses Durga, Lakshmi and Saraswati represent power, wealth and knowledge. Ramayana and Mahabharata, depict king Ravan and Dhuryodhan respectively, as evil for sexually harassing women.
Before the misrepresentation of caste system in India, a community was defined according to the nature of work they were doing. And not on basis of religious inferiority or superiority.
Hence, in India we need to go back to 1 AD to understand the concepts of inclusive society to develop standards for inclusive workforce.
5. Social Communities and Soft Skills
The American social concept is that an individual’s needs are superior over family and society needs. However, the Indian concept propagates superiority of family and society needs over personal needs. With nuclear families in the last twenty years, Indian society is transitioning towards American concept, thinking it is better.
Though if you read the latest American management mantras, they talk about:
a) Building relationships – Transactional relations do not work in the long run, hence the use and discard policy is losing ground. Indians work with business partners after building a relationship of trust and respect.
b) Collaboration and teamwork – Being able to work with teams is a key strength. Employees are rewarded for collaboration. Individual star performers no longer enjoy the prestige of the last decade. Indians work well in groups as they have numerous members in family to cater to and learn in childhood to meet different stakeholder interests.
c) Service leadership – Arrogance, over-confidence and extravert behavior in leaders is rewarded in America. However, now service leadership or level 5 leaders are valued. Indian leaders, be it Gandhi or Nehru, were known for their humility and service leadership.
Indian civilization is one of the most ancient civilizations in the world with a very rich history. The Vedas, Arthshastras and various philosophical texts provide a vast reservoir of knowledge on life, business and society. Even Steve Jobs and Beatles got that. Indians needs to go back in time to understand those principles. While the west offers a lot of knowledge, it has been tested only for a century or so and fatal flaws are showing.
Adopting the western principles blindly is not the solution. One of the biggest risks is when a company copies or adopts something without evaluating the feasibility. It holds true for management models also. Choose the best of both worlds and devise a new management model suitable to India.
Justice Verma’s report covers sexual harassment at the workplace. While in September Lok Sabha cleared the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Bill, 2012, it is pending with the Rajya Sabha. The Supreme Court ruling of the Vishakha case in 1998 hasn’t improved the condition of women in the workplace. It looks like things are finally changing for the better with Justice Verma’s report as he covers some critical issues about the topic. Here is a brief overview of the issues Indian working women face and the relevant aspects of the act. The Indian organizations will now have to address these human resource risks properly.
The Indian Constitution grants equal rights to women. It states that women have the fundamental rights to life with human dignity, to equality, and to work in ones chosen profession or trade inherently include protection from sexual harassment. Article 42 emphasis that – “The State shall make provision for securing just and humane conditions of work and for maternity relief”. The Constitution guarantees certain fundamental freedom to women as it considers that as a bedrock for democracy. However, Indian society even after over 60 years of independence considers women a subservient gender. Sexual harassment is rampant in society including the workplace.
Finally, the 2012 Sexual Harassment Act will provide some protection to women. According to the act, sexual harassment constitutes of the following unwelcome acts or behavior (whether directly or by implication) namely:
(i) physical contact and advances; or
(ii) a demand or request for sexual favors; or
(iii) making sexually colored remarks; or
(iv) showing pornography; or
(v) any other unwelcome physical, verbal or non-verbal conduct of sexual nature.
Further on, the act states that the following circumstances, along other circumstances, if they occur or are in relation to or connected with any act or behavior of sexual harassment may amount to sexual harassment:-
(i) implied or explicit promise of preferential treatment in her employment.
(ii) implied or explicit threat of detrimental treatment in her employment
(iii) implied or explicit threat about her present or future employment
(iv) interferes with her work or creating an intimidating or offensive work environment for her; or
(v) humiliating treatment likely to affect her health or safety
2. Formation of Employment Tribunal
The act mentions formation of Internal Complaints Committee by the organization and a Local Complaints Committee at district or local level. The logic is that the employee should first address the complaint internally and if the employer is involved then the aggrieved women should approach the Local Complaints Committee. However, as we have seen in the ten years after the Vishaka case, these are not effective when senior managers are involved in sexual harassment. The woman generally loses her job if she files a complaint as the Internal Committee driven by Human Resource department supports the senior management.
Justice Verma report suggests formation of Employment Tribunal. He suggests that Internal Complaints Committee and Local Complaints Committee are not required as this process dissuades the women from complaining. I completely agree with Justice Verma. The senior managers will have lessor influence on external parties.
3. Punishment on Filing False Complaint
The act states that if the Internal Committee or Local Committee determines that the allegation made by the woman was malicious or false, the woman can be punished for filing a false complaint
Justice Verma’s report recommends that a woman should not be punished for filing a false complaint.
Though, overall I am against the view of filing false cases and consider that these should be punishable. However, in case of sexual harassment, my view is that the women should not be punished. In all probability, there will be a few false cases filed by some crooked women. But in India due to society’s attitude, very few women have the courage to fight sexual harassment publicly Secondly, if they file a case against senior managers, with the corruption level existing in the country, most cases can be made into false complaints. Hence, in these cases women should not be penalized if the case is proven false.
4. Time Period for Filing Complaint
The act states that a woman should file the sexual harassment complaint within three months of the incident or the last incident.
Justice Verma states that there should be no time limit for filing the complaint.
I agree with Justice Verma’s suggestion. Indian women are geared to think that humiliating and sexually harassing behavior is acceptable. The kind of thinking is “men will be men”. Very few women have the courage to point blankly tell a man that sexually harassing behavior is unacceptable in civilized society. Hence, women generally file a complaint after repeated harassment. Problem further is intensified for married women, since the husbands tend to blame the wife for inappropriate behavior There is a high-level social stigma attached to it, and sometimes marriage breaks up. Lastly, sexual harassers threaten a woman by spreading rumors and doing various acts to ruin her reputation. Hence, in Indian context there should not be a time limit for filing the complaint.
5. Transfer of the Complainant
The act specifies that the Internal Committee or the Local Committee can transfer the aggrieved woman or grant leave to her.
Justice Verma’s report states that this should be done with the consent of the woman.
I agree with the logic of Justice Verma. Sometimes if a woman files a case in one city, she will be transferred to a remote place from where travelling expense will be significant or unaffordable. Hence, the woman will be unable to fight her case.
Moreover, sometimes she is forced to take leave and then rumours are spread. When she comes back, her job is given to another person. After waiting for a couple of months in the hostile climate, she automatically quits. Hence, in all these cases a woman’s consent should be mandatory before any action is taken
The act states that the Internal Committee or the Local Committee at request of the aggrieved woman takes steps to settle the matter between her and the respondent through conciliation. The settlement so arrived should be recorded.
Justice Verma contends that conciliation is against the dignity of the woman and adds further to the humiliation. Hence, the section should be deleted.
In my view, the act states that conciliation process should start at the request of the woman. Hence, it is her practical choice and she should be allowed that. In Indian society, a woman may not have the means to continue a case for long and her reputation is perpetually at risk.
However, the act should specify the level and magnitude up to which conciliation should be attempted. If a woman is being threatened or the case is serious, she should be advised against conciliation and provided adequate protection from retaliation.
7. Compensation and Employer Liability
The act states that an appropriate amount should be deducted from the salary and wages of the respondent and paid to the aggrieved women. If the employer is unable to deduct, for instance, the employee leaves the organization, and respondent fails to pay, the same will be forwarded to the District Officer.
In my view, the organization is liable for compensation as it failed to provide a secure and dignified working environment to the woman. Justice Verma has also mentioned that employer should be liable to pay for all losses incurred by the women due to sexual harassment.
The act only specifies a fine up to fifty thousand rupees is the employer fails to constitute an Internal Committee or contravenes any of the sections of the act. This amount is peanuts for large organizations and they shall blatantly ignore the act. Justice Verma has rightly recommended a prison sentence in case there is a systemic flaw and discrimination is encouraged. In India in some organizations, sexual harassment by senior managers is considered a right. They can choose any women and she is required to comply.
Justice Verma has done a commendable job in highlighting the problems women face in Indian society and in giving solutions. For once, the report isn’t a white wash to cover some political agenda and shares strong opinions. We have to hope that the government takes the required steps with the same speed the report was issued. More than 25% women in India face sexual harassment at workplace and they have no effective redressal system to file their complaints. For a civilized democratic society, this is an unacceptable situation. The Indian organizations would find the rules tough to follow. However, 25-30% of employee strength constitutes of women. Hence, they must ensure secure and dignified working environment. Finally, after a woman lost her life in a gang rape, we are moving in the right direction. May her sacrifice be worth it.
Wish my Indian readers a Happy Republic Day. Especially the women, hope you get the freedom denied to you even after independence.
Barclays is again in the limelight due to a damaging report on the deviant culture existing in the Investment division. After LIBOR rate fixing scandal and quick departures of senior managers, trouble is again brewing in Barclays. The COO of Investment banking division, Andrew Tinney quit when it was discovered that he shredded the only copy of a report that clearly stated the bullying culture of the organization. Then the new CEO, Anthony Jenkins discovered when an internal whistle blower mentioned it to him. He sent out a message to staff on culture change. Here are some insights into the story.
1. The Damaging Report on Dysfunctional Culture
Daily Mail story states that the report prepared by Genesis Ventures - “paints a devastating picture of incompetence and arrogance at the bank, showing that executives:
Pursued a ‘revenue at all costs’ strategy.
Fostered a culture of fear and intimidation.
Were ‘actively hostile’ to the idea of compliance with banking rules.
Presided over a ‘broken culture’ where problems were ignored or buried.
Allowed the business to spin ‘out of control.”
The senior management intentionally understaffed support functions, was hostile to compliance and attacked those who spoke contrary to senior management views. A senior manager threw the risk management report publically saying – “this is a piece of s***” showing utter contempt and disregard for the same.
The summarization of the report states – ‘The senior team portray themselves as all-powerful and all-knowing… and people chose to disagree with them at their own peril. It is a mentality of superiority which, when combined with other deficiencies, stops the team from tackling their blind spots. When those deficiencies are in compliance, this results in serious issues that no one else has the power to address.’
The bank’s culture has become completely deviant, and it will be a long road ahead for significant change to occur. The problem is that this issue is prevailing in other banks also. They depict the same culture and attitude. Unless we understand why it is occurring and senior managers take sincere steps, nothing positive will happen.
2. The Psychological Explanation
Western banks are known for their arrogant and aggressive culture. Some view arrogance as a positive trait and humility as a negative trait, while the opposite is true. Stanley Silverman developed Workplace Arrogance Scale to measure arrogance level in the organizations. He stated the arrogant people demean others to prove superiority and competence. However, as per his results arrogant people showed lower intelligence and self-esteem in comparison to their peers. He identified four red flags to identify arrogant behaviour:
Does your boss put his/her personal agenda ahead of the organization’s agenda?
Does the boss discredit others’ ideas during meetings and often make them look bad?
Does your boss reject constructive feedback?
Does the boss exaggerate his/her superiority and make others feel inferior?
If you link back to the damaging report, the senior management at Barclays showed these traits in abundance. Even during the financial crises, the bankers didn’t feel apologetic and showed no humility. Now, being in such senior positions one cannot say they lack intelligence, however, questioning their self-esteem is definitely a valid path.
In another psychological study conducted by Angela Y. Lee, a professor of marketing at the Kellogg School of Management, it was determined that people with low self-esteem defend the brands more when their favourite brands are attacked. This explains why bankers refused to change and continued their behaviour when under attack during the financial crises.
3. The CEO Message for Culture Change
Deal Book reported that Anthony Jenkins, the CEO of Barclays sent a mail out to the staff with a clear message – “change or leave”. He categorically stated the values – Respect, Integrity, Service, Excellence and Stewardship – to be adopted by Barclays employees. He further added that those who do not change their behavior are free to leave. His words were – “My message to those people is simple: Barclays is not the place for you. The rules have changed. You won’t feel comfortable at Barclays and, to be frank, we won’t feel comfortable with you as colleagues.”
He highlighted that in the last two decades financial institutions pursued profits and compromised integrity and reputation of the organization. He said there is no choice between values and profits. Employees must pursue profits while maintaining values. Evaluation of ethical behaviour will be incorporated in performance appraisal process.
That is a very strong message from the CEO of the organization to transform the culture of the organization. Two questions in everyone’s minds are – will they succeed and how long will it take.
Bill Gates had famously said – “The world won’t care about your self-esteem. The world will expect you to accomplish something BEFORE you feel good about yourself.” Maybe organizations should care about the self-esteem of their employees and their senior management team. Studies have shown that people with higher self-esteem show more ethical behaviour and are less likely to get involved in wrongful acts. The present trend of pursuing material gains at the expense of personal values destroys self-esteem in the long run. Bankers have shown extreme tendencies to flaunt expensive toys to feel good and build a superior image. In all probability, they are caught in a catch-22 situation at a psychological level. It might not be possible to change the culture without addressing the core issues faced by the staff.
British Petroleum was recently fined US $ 4.5 billion for the Deep-water Horizon disaster in April 2010. The highest ever fine till date. The verdict implicated two employees for negligence. Similar news is coming of regulators charging huge fines to banks for their wrong doings. Regulators and law enforcement agencies change in approach sends a clear message – regulators won’t tolerate lax attitude towards risk management. Organizations will have to pay through their nose if caught contravening laws and regulations. Therefore, risk managers have to pull up their socks and gear themselves for tougher times.
It is apparent that risk management approaches and practices that worked until 2011, will not work by 2015. Frequently, risk managers focused on self-preservation by blaming the top management for lack of support. They continued the silo approach and turf wars with other risk management departments at the expense of the organization. They escaped majority of the blame for the debacles, as business was responsible for the risk management decisions. Risk managers role was recommendatory and supportive in nature; hence, the ball was never in their court.
1. New demands from business heads
In my view, business heads will not allow this type of smooth sailing to risk managers now. They will hold risk managers accountable and responsible for the level of risk within the organization and for failure to prevent risk management disasters. In the current environment, risk managers need to focus on the following.
a) Build risk awareness across the organization and spread the message to every employee of the organization.
b) Maintain a risk register that captures internal and external risks at strategic, tactical and operational level.
c) Ensure decisions are taken after giving due regard to risk versus reward parameters. Organization risks remain within the risk appetite.
d) Guarantee complete compliance to all legal and regulatory requirements at a global level.
e) Make risk management departments efficient and effective by managing costs and working with limited resources.
2. Change in leadership style
Hence, it is crucial for risk managers to change their leadership style and take a deep look on the management practices they have followed until date. I know you would think that isn’t a big issue. I also thought on the same lines before I read Lisa Wiseman’s views on multiplier effect of leadership. She is the author of the book – Multipliers: How the Best Leaders Make Everyone Smarter. I must say it is a revelation. She has divided leaders in two major categories – diminishers and multipliers. Multipliers use and amplify intelligence of others that results in a 2X effect. Unfortunately, diminishers use less than half the intelligence of those around them. Diminishers have the attitude that they are the smartest in the room, and hence do not leverage on the intelligence of others. On the other hand, multipliers create an environment where best thinkers grow. See the chart below to understand the ten sub categories.
3. Risk managers diminish business teams
I understand that our first reaction is to believe that we are a multiplier leader. However, you will change your opinion on reading the details in the paper or on taking the accidental diminisher quiz (links below). Majority of us are somewhere between the spectrum on multiplier to diminisher. Here are some of the instances where risk managers show diminishing behavior:
a) As risk managers sometimes we have focused on building large departments to show importance rather than deliver value. We do so at the expense of other risk management departments who might be requiring the resources desperately.
b) We use our positions politically to create a fearful environment among business teams. They believe all shortcomings and failures will be reported to senior managers and their jobs will be at risk.
c) We use our limited knowledge of business operations to give advice to business teams without considering their viewpoints and thoughts on the same.
d) We roll out risk management plans and initiatives without having any discussions with the business teams and people at lower levels that have to execute the plans.
e) We believe without our personal involvement business teams cannot manage risks. Instead of training and educating business teams, we get involved in every small aspect.
Though, if you read the top five things risk managers have to do at the top of the page, we need to cultivate multiplier behavior patterns. Nothing can be better than using twice the brainpower of a resource at the cost of one. Moreover, the multiplier effect will facilitate using the knowledge residing with business teams. It is only when business teams start thinking about risk management on their own that organizations will avoid disasters.
In the present environment, risk managers have to meet new demands with insufficient resources and knowledge. Do you think becoming a multiplier will address some of the problems? According to you what alternative approaches should be followed?
As we know, management is about formal authority, whereas leadership comes from moral authority. Leaders derive moral authority when followers trust them. Hence, the crux of people management is building a relationship of trust.
Auditors and risk managers face some serious challenges in building trusting relationships with business teams. Frequently, when the business teams hear an internal auditor is coming to meet them, the reaction is – “Why is he coming? When will he go?” Auditors are unwelcome, as business teams view them suspiciously. The relationship is as healthy as that of a divorced couple sharing parenting responsibilities. Aha, we base marriages on trust and it reminds me of this one.
A man took this beautiful finance to his attorney to sign the pre-nuptial agreement. The attorney looked her over, smiled and asked the man – “Do you trust her?” The man replied – “With my life, but why bet my money on it”.
As is obvious, the trust levels are deteriorating in most relationships. However, auditors and risk managers cannot use that as an excuse. Internal auditors enjoy very low confidence level with business teams. A recent PWC State of Internal Audit survey stated that just 45% of the respondents were comfortable with internal audit’s management of critical risks, though 74% had enterprise risk management in place. Another point to note was less than 50% believed that their internal audit function was well coordinated with risk management functions. The scenario is dismal; there are communication gaps with business teams and risk managers. The focus has to be on building better relationships.
Auditors must look at David Maister’s trust equation. According to him:
Trust = Credibility + Reliability+ Intimacy
Let us see how the four elements affect auditors’ relationships with business teams. More important is to determine a way to build trust-based relationships instead of transactional relationships.
Establishing credibility is about meeting technical and emotional aspects. The technical knowledge of auditors and risk managers qualify them guide the business teams. If they lack relevant qualifications, experience and knowledge, the relationship of partner, mentor and advisor is doomed. However, all the knowledge and experience will fail if the business teams believe that auditors and risk managers do not walk the talk. An auditor cannot pile on the free launches offered by business teams, and in the same breath talk about ethics. Here, to build trusting relationships, each auditor and risk manager in the team has to establish personal and professional credibility.
People need to know where a person stands on various issues to develop a comfort level. They need to perceive the person as predictable, just, fair and ethical in his/her dealings. The business teams fear auditors and risk managers; a politically motivated report can build up a storm. The principle of issuing accurate, apolitical and balanced reports goes a long way in building a reliable reputation. Without it, there is going to be a fight, us against them mentality with prevail between business teams and auditors. The win-lose situation created will result in business teams viewing auditors and risk managers as the bad boss archetype.
This is about sharing confidences and deepest darkest secrets about the professional life. This is not about personal life. An auditor and risk manager delve into the negative side of business – identify shortcomings and high-risk scenarios. Depending on the organization culture, these findings have an indirect impact on career development, promotions, compensation and hiring and firing of business teams.
Hence, business teams will stay silent and it is not enough for auditors to say – “I have an open door policy”. Ethan Burris in his research found that – “employees who speak up and challenge the status quo are viewed as less competent, less dedicated to the organization and more threatening compared to those who support the way things are. They are also rated as worse performers, and their ideas get less support.” No one is going to open up and identify the real risks and concerns, unless some level of intimacy is established. Hence, auditors and risk managers need to show emotional honesty to break down the barriers of communication.
When people view a leader entering into relationships primarily to serve his/her own self-interest, then this denominator will wipe out the positives of the three elements in the numerator. The use and discard policy of transactional relationships causes engagement and commitment to plummet. In this case, as Burris says – “It can be scary to open up the lines of communication, because you don’t know what’s going to come out of it.” Thrusting relationships will not form when business teams perceive risk managers as serving their own agendas at their cost to win brownie points and laurels. They need to be transparent, altruistic and balanced in their approach.
An auditor went to do a stock take of a weapons factory. The inventory manager hated the auditor. In the previous report, auditor had made many disparaging comments about the manager’s work. This time, the inventory manager in a pleasant voice said to the auditor –“Please don’t touch this, it is dynamite. The manager held the next bin and the manager said – “Oh that is just anthrax”.
Rather than face a similar situation, it is much better to follow Blaine Lee Pardoe’s advice – “When people honour each other, there is a trust established that leads to synergy, interdependence, and deep respect. Both parties make decisions and choices based on what is right, what is best, what is valued most highly.”
This week Barclays Plc made banking history for the wrong reasons. The unheard occurred – the chairman, chief executive officer and chief operating officer – all resigned within one week. While chairman of Barclays, Marcus Agius took the blame saying “the buck stops with me“, initially Bob Diamond said the incident was “inappropriate“. An understatement or lack of adequate vocabulary for describing a manipulation with such huge impact on the financial markets? LIBOR is used as a benchmark for prices of approximately $ 350 trillion of financial products. British and US authorities fined Barclays $453 million!
In the parliamentary hearing yesterday, Mr. Diamond did modify his viewpoint and said “behavior is inexcusable“. In the hearing, Mr. Diamond implicated Bank of England and the Financial Regulatory Authority. With a dozen more banks under investigation, this story of rigging interest rates isn’t going to blow over. It is just going to get murkier with time.
Watch this video to get an inside view on the procedures for calculation of LIBOR and the lack of monitoring by the regulators. Some speakers have given volatile views, but these are definitely worth listening in case of such a serious breach of business ethics.
In the last couple of months, titans of banking industry are facing the public ire. First Jamie Dimon was called in for questioning by US senate, yesterday Bob Diamond was questioned by UK parliament. The winds are blowing in a different direction; public is outraged by lackadaisical attitude of bankers towards ethical practices. Since the financial crises, many have written about the need to change culture within the banking organizations. However, from the frequent scandalous news stories, it doesn’t look that the wizards of the industry are understanding the social strategic inflection point.
With senior bankers’ ambition to join billionaires club, even the best minds have developed blind spots. The ambition is for more and more money; they have forgotten that more is not always better. We need banking CEOs to have the ethical mindset of Dalai Lama to bring about a positive change in the industry. Is it possible, what do you say?