‘Bosses are no saints… and you can’t teach someone to lead’

Linda Hill, professor at Harvard Business School, was in India last week promoting her latest book Being the Boss: The 3 Imperatives of Becoming a Great Leader and for research at HCL Technologies for a case study to be published on Harvard Business Review. She has also authored another book on leadership — Becoming a Manager: How New Managers Master the Challenges of Leadership. The organisations that she has advised include General Electric, Reed Elsevier, Accenture, Pfizer, IBM, MasterCard, Mitsubishi, Morgan Stanley, National Bank of Kuwait, Areva, and The Economist. Excerpts from an interview with DNA:

What brings you here?
This is my first visit to Mumbai, but not to India. When I was 14 years old, my mother had a dream to see the Taj Mahal so we came to Delhi and Agra. I’ve been back to Delhi and Chennai for work. For whatever reason I’ve not been to Mumbai, this is my first time.

I’ve come for a couple of reasons. I am the chair of the leadership initiative at Harvard Business School. And one of my responsibilities is to make sure that we fulfill our mandate to educate our leaders to make a difference in the world. And a piece of that is to make sure that we are doing what we do in a way that allows people to work around the world because it’s a global economy.

Part of the reason is that the Harvard Business School has opened a corporate learning centre in Mumbai and I do a fair amount of work for those groups and I have come over to say hello to the people and get to know more about the community here.

Another reason I am here is to make relationships and learn about what’s on people’s mind. We’ve also got a series of cases on HCL Technologies with Tarun Khanna, who is one of my colleagues and is our strategy professor. HCL Tech is also one of the research sites for the next book I am going to write which will be out next year. We are writing a case on the acquisition of Axon.

We spent most of last week collecting data about the acquisition.

Talking about Axon, many believed at that time that the deal was very expensive. There was one other Indian IT firm - Infosys — that walked away from the deal because they thought the valuation was high. How did HCL get Axon to work for it?
It’s funny. When I am doing research on a company I always tell them I’ll come back and tell you what my interpretation is from what I’ve seen and I haven’t done that with them yet. Having said that I’ll say that HCL has a very esteemed history with great founders and it is a company that you should never underestimate and they are willing to make bold moves. And this is one controversial move but I think when they do something they are very good at thinking through.  I apologise because I shouldn’t say much more than that because that’s just the arrangement I made with the company. But I think what you see with IT companies in general that they are all trying to understand the way to grow up the value chain. As you all know, India is not only about low cost, it has a very talented labour in a knowledge-intensive environment and I think that one of the things that the rest of us outside India need to understand is how much innovation and how much talent is here.

Your visit coincides with a major transition happening in India, with senior business leaders retiring in a span of a few months. It is a tricky time as these institutions have become world-class under their wake. Anyone taking their corner room will be challenged by the legacy that is left behind by these tall leaders.

How do you think the successors should take up charge?
I don’t know the details of a lot of those situations. Whether or not that transition happens smoothly or not, it is a very big event in the life of any company. And I say that one of the things that they should ask themselves is how well is the company prepared for this transition. Have they been developing successors — and that is one of the important responsibilities for people on boards to make sure they have taken the time to do that. I see a lot of evidence in this that you promote someone as CEO who grew up in the company. In the best companies there is a process by which people are developed and if it is a family owned business it’s the same deal - if the children are going to be the ones or the nieces or nephews. You have to make sure that they have the right roles and they have enough experience and they were credible in their roles. I used to do a fair amount of work in Latin America where there are quite a lot of family conglomerates. Some of those companies have done a good job of making sure the kids are trained at the entry levels and develop very good networks in the business so when the time came it won’t be harder to follow the father.  There are also instances where this had not been done.

So companies that build leadership talent throughout are in a much better shape no matter who goes to the top.
The basis of this book is in part you need to develop leadership throughout the organisation.

You need to develop leadership that knows how to prepare for today and also fill opportunity gaps from where the company is now to where the company could be. So you are much more equipped to weather those transitions. Those are obviously big shoes to fill.

Do you think an expatriate can become the chairman of Tatas?
I haven’t closely followed the group. We are studying a company that appointed a non-national to head the company. The amount of criticism that the board of the company faced was unimaginable. Part of it was the national pride. I have a written a piece called “Winning talent management in emerging markets” and one of the things that we are seeing in China is that Chinese people who did their MBA in the US used to go back to a multinational. They have now concluded that it will be more attractive to work for Chinese companies — because they are never going to get far in a multinational because they are not Americans. I have many Indian students who want to come home because their economy is growing. I think it is very difficult to build global meritocracies. Fundamentally, we choose people whom we can trust. We trust people who look like us and grew up like us. The Tatas are growing and fundamentally they and every Indian company should be ready to have talent from all over the world. This is something that companies are going to be struggling with, because it is hard to make these choices.

But still we have Indra Nooyi and Vikram Pandit at the helm of great American organizations. How do you explain that?
You don’t see too many companies having expatriate CEOs. You see the CEOs from home countries with a few exceptions. The people you mention are American citizens. Our dean Nitin Nohria is an American citizen. It is a big deal to a lot people that Nitin is our dean. To me it is natural, he is a dear, dear friend and he is spectacularly capable and a deep, caring person. Nitin has been in Harvard Business School for 27 years. I think he became an American citizen some six or seven years ago. We share a secretary. We’ve been friends since a very long time. He’s an insider who happens to be of Indian descent. I am not denying his identity but he’s the keeper of Harvard Business School.

Is there any empirical evidence that suggests very large companies that are led by outsiders versus insiders have done better?
At Harvard, we looked at the people who did not become the CEO at General Electric. When GE selected Jeff Immelt there were four or five others who were in the running who could have easily been elevated. They were elected to become CEOs of other companies.

What my colleagues did was to make predictions on who’s going to be successful as a CEO in the new company they went to and who wasn’t based on certain assumptions. What about talent that was portable and what about talent that was not portable. And they were able to make very good predictions about who as an outsider could make it and who couldn’t. They predicted not all of them would be successful. So, talent is not as portable as we think.

So I worked on a piece in which we found that there used to be companies that tried to identify the high potential. They looked at what we refer to as value creators — those are the people who fill the performance gaps; nowadays they want these game changers or people who can close the opportunity gaps because who knows what the world is going to be like. People are always looking for opportunities, the weak signals, the trends and knowing how to build companies that can always take advantage of such opportunities.

Many leaders have come to their own and gained confidence after being tested by crises, challenges to their leadership? Have you studied those situations?
Franco Bernabe, the chief executive of Telecom Italia, came from Italy’s oil and gas business. I had the privilege of writing a case study of him for Harvard Business Review. What happened to him when he became CEO. He’s been the head of strategy and overnight he was made the CEO of the company never knowing that he would become the CEO of the company. Because Italy went through this clean-up from all the corruption that used to happen there, and he was one of the few who were left standing. It was a public company and one of the things that happened at that time was privatise some parts of the state-run companies. He suddenly found himself the CEO. And I would tell you, in the first year at the job, two board members committed suicide and Bernabe was accused of corruption and his offices were locked. If I ever wrote a piece that would be a movie this was the piece. And he had done nothing wrong. He was the strategy person, he finds himself running a 100,000 people company. I think he was a man who was tested. For him the worst moment was when his children saw that he was accused of corruption. You can imagine you were sitting for dinner and the TV comes on, and it says Bernabe takes millions of dollars and his son wails: Dad?

For him that was as if a palm fell on his head. Telecom Italia was in a tricky situation and I think it was about Bernabe’s resilience, his capacity to manage the stress not for himself but for the people - that is the whole company.

Of the people I have studied this was the most traumatic. I am sure there will be stories coming from Japan. Just as we had leaders during 9/11, there are CEOs who rose to the occasion in an unbelievable way; they understood their duties and obligations.

I was reading an e-mail of a very senior executive in Japan, and he’s driving 300-400 miles just to get to his other office and make sure people are okay.

In India, we have a similar situation. Several telecom companies are accused of corruption…
Bernabe was not corrupt and he proved he was not to everyone, including his mother who assumed he was. He’s an incredible man. He actually lost his job when Olivetti acquired Telecom Italia. But he was asked to come after nine years after he was proved right on many counts he said years before.

And now a potential successor to Warren Buffett  has been accused of benefiting from insider information…
How do you tell people that if you want to get ahead you don’t have to cheat? People need to have heroes and people need to aspire who to be like, In a lot of countries children who don’t have much means see these people and these are people whom they admire. Sometimes I wonder what people are thinking. But I don’t know about the Berkshire situation. I don’t think Warren (Buffett) would be too happy about that.

How does a leader take a decision which is not hasty and at the same time is seen to be just?
In the Bernabe case, one of the things he does is very controversial. At some point he tells people at a certain level that they all have to resign and he says “I think it is the only fair way to do this because I don’t know who’s guilty and who’s not. I want all of you from this layer to resign. I know it’s unfair”

He did this because he had to start afresh. So he forced a certain layer to resign and he said sometimes you make sacrifices. It’s a necessary evil for the good of the whole. Those are really tough decisions.

I know because my husband who’s a doctor often is upset because the hospital makes doctors settle (even when you have done nothing wrong) because to go to a trial is just not worth it for the hospital. Chances of losing are high and it is too time-consuming.

The positions are not vindicated in that situation. That’s why we are not a CEO (laughs).

Talking about the book and the three imperatives for a boss - was there any that you consciously left out?
A couple of things. Boss is not a word I should’ve been using because it is a global world. Two reasons why we had that title: One is, no matter what society we are going to, everyone knows what a boss is. Period. So to me it was a word that would translate well in any language and I do work in three areas. I do work in leadership and how people learn to lead. I do work on innovation and I do work on leadership on innovation and finally I do work on globalisation and implementation of global strategies. I very much wanted to make sure that if we chose the word leader or manager they all have connotations. But the boss, still we immediately picture our favourite boss others picture their worst boss (laughs).

Kent (Lineback, the co-author of the book) was a good executive sometimes, and he wasn’t that good sometimes. He did not achieve what he could have achieved and we got into a conversation and I began to think about all the well-intended talented people I met in the course of my career and most of them were well-intended. Most of them could not fulfill their ambitions or had the impact on the organisations they intended to have.
Kent said to me let’s write a book that’s not a laundry list. Often you read books on leadership and it’s a laundry list. The plan was to have it simple enough.

We wrote in an order that we think fits a successful manager. So the first part is managing yourself because you start using yourself as the instrument to get things done. The second is managing a network because in today’s organisations people have many bosses and lots of peers. And once you can work with your peers and bosses then you can create the conditions necessary for your team to be successful. That has become a real imperative.

And the third imperative is of people you have formal authority of — your team. We really tried to think about the misconceptions. I don’t think we left anything out.

But managing himself is a given for a leader, isnt’ it? After all they are leading a team…
Well, you cannot teach someone to lead. They have to teach themselves. It’s a self-development process. The leader has to make an emotional connection with the people that are necessary.

In the end, it is about you. There is a fair amount of research to show that if you are not somehow self-aware it is pretty much impossible to match your intent to make an impact.

Many times bosses have bloated egos, who surround themselves with a coterie. By the time he gets to know the harsh reality, the company suffers…

Many of successful leaders we met were humble and had humility. But some of them had very healthy egos. We met people who were with Nelson Mandela in jail. Some of them told me, when you write about him say that he was human and not a saint.

That’s really important. He is also complicated like all of us. And he has his good days and bad days. It’s true, none of these people are saints. What we do know is that leadership comes from capitalising on your strengths. You have weaknesses, which we call as de-railers, that we need to fix.

Can you name five good CEOs you have come across?
To me, good means, good to their community, to their employees, to their shareholders. Not only financial performance. I admire many people. The man who runs the engine of Google, the infrastructure of Google. He is a good leader. Ed Catmull of Pixar — he’s a spectacular leader. Vineet Nayar of HCL Technologies is a spectacular leader. Meg Whitman of e-Bay was a very good CEO. She’s no longer the CEO of eBay.

Would she make a good political leader?
I don’t know. California definitely didn’t think so. I learnt a lot from her.

And the fifth?
Luca de Meo. The young executive from Fiat who joined Volkswagen.

The worst?
Jeff Skilling and Kenneth Lay of Enron. Although I don’t know what happened.