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Case Study: Can’t Quite Cut The Mustard

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 Vittal Morro was most pensive. Outside the window of his office on the 14th floor, he saw a wave of humans in jogging gear and blue headbands running the Citizen’s Power marathon to save something or the other. It surprised him that people were willing to run for causes whose outcomes remained in the realm of debate.

 
Morro, chairman of the Morro Group, feared he was becoming cynical. Last night, he had heard two different CEOs on CNBC talk casually about their business approach and attitude; they talked about new processes and waste treatments that they were investing in; they talked of inclusivity and diversity; they talked about a green world and a socially evolved corporate ethos. Morro noticed that these men were no older than his grandson Ambarish. He winced as he realised that he had not heard similar vocabulary in his son Prasad. At 47, Prasad was the CEO designate of Morro Enterprises. But father Morro was not sure if the Morro Group had an adequate successor.
 
The Morro Group was large — with presence in retail, BPO, telecom and packaging. The senior Morro had added to the portfolios one by one, slowly letting go of the traditional trading business. The businesses were sturdy and healthy, especially the retail chain MoMart, which was set up in 2006, ably supported by Ambarish, his elder daughter’s son, who was then just 29.
 
Vittal Morro was over 80, and, it seemed to most, he worked harder than Prasad. Today, he struggled with the pulls of his heart — he wanted to spend time with his ailing haemophilic grandson, Tapu, in Canada, with whom he spoke every night — and steering the business which, he felt, did not yet have an able steward.
 
Yet, there were many days when Morro saw far into the future… and he saw the present, and... despaired.
 
What ailed Vittal Morro’s perception? Father Morro suffered from his own vision — a vision not shared by Prasad. Yet that vision had built the business and seen it change course gracefully post-liberalisation. It is said that leaders must carve their vision in stone so that the masses can take it forward. Is that really true or just a distorted perception of a sycophant follower? Shouldn’t Prasad envision for the business himself? But then has he seen and felt the turbulence of change? In the early 1990s, when the change was happening, Prasad was more of a young father busy flying paper planes for his sons Varun and Vidur, who were today studying in the UK. 
 
It was more than this. In fact, it was none of this. Morro’s anxiety was about a certain mindset which he was convinced the group needed. Morro wanted deep and incisive structural changes at MG — changes that would not just recraft their vision and strategy, but verily even how the teams thought, ideated, felt and acted, nay, responded. But it always seemed to him the employees were ever patting themselves on the back for the growth they laid claim to. It was during such moments that Morro sought the calm Tapu whose art books were filled with sketches of him playing ice hockey. “Naanu, you know, this game was difficult,” he would say referring to one sketch, “but tomorrow’s game is mine!” Tapu painted his wins and losses.
 
Morro watched all around him. Companies like Teffer, Gerret, Delaware, etc., were doing things that fascinated him. But what he had seen specifically was that they were bringing in leaders from outside, something unheard of among these biggies who swore by their home-grown managers.  Morro thought of the Syndica Group. From being a family-managed company, it had transformed itself into a professional Indian business.  The growth and scaling that Syndica achieved had been possible — but how? How did the family shed its ‘family’ status, ego and attitude? How did they manage to hire the kind of professionals they had managed to? 
 
Recently, at a CII meeting Homi Darashaw,  the head of a large broking firm, had said something that had set the pace for Morro’s restlessness. “Advancement, not growth, is the key, Vittal. Growth is finite. Advancement is eternal! The moment you think growth, you think profits and wealth. The leader I seek is one who can inspire among his teams change that takes morals, motivation, expectations to a higher level.  The operative word is inspire, Vittal! And that is advancement!” he had said.
 
Inspire. Advance. Not grow… Vittal Morro was not happy anymore. 
 
The building blocks of institutions had changed. The very essential headquarter-centric organisation had been abandoned in favour of geographically dispersed management. Why, even the small start-ups were being birthed with huge wings that would give them global reach from day one, ‘local’ not being enough. 
 
MG would need leaders with wide wing spans that accepted, added, gave, inspired, included, motivated, and had ideals that reached far out. Therefore, graceful execution….
 
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From a time when the group sourced and looked up to Europe and the US, today, the neck turned right and the action was in Asia. Suddenly everyone had noticed that the old approach was not going to work. Homi had said it too. “There was a time when an employee’s upward mobility was obtained through moving from a lower product category like animal feeds to a higher one. Or, mobility upwards was a move from branch to region to corporate office. Today, mobility is moving outside India to a parallel function or to a larger market. Today, competition is from every side!”
 
Morro was seeing shades of that flickering around his organisation. Yes, employees were ahead on the growth curve,  and did not wholly depend on the employer for the learnings. But other things were at play as well. Competitiveness was not wholesome. It was reckless and questionable. Homi had mentioned organisations that gave their dealers “fun” holidays in Bangkok. “See what I mean? An India that seeks growth. Not advancement,” he had said.
 
Morro could not have agreed more. Now dealer management meant forcing goods down the dealers’ throats. Worse, employees were being compelled to bring pressure on dealers. The whole language and vocabulary had changed too. “How much has Kashmol added since last year?” Kashmol? Kashmol was Ashok Singh Tiwari. Morro’s father had known that family since he was a student at Forman Christian College, Lahore. But Ashok Singh Tewari was Kashmol, and his ‘data’ was available under customer code 3678. The dependence on systems and processes that converted people into numbers and a relationship into data, was no more human.
 
Or when Prasad wanted expensive gifts (read Rolex watches) sent to certain people (they had asked for it) to get approvals on land deals.
 
My fear is Morro Group is not a healthy business anymore, he told Tapu. “Is it anything like ice hockey?” asked the little boy. “Just the ice without the hockey,” said Morro. “Does it have real people?” asked Tapu. “There are people but their hearts are shrinking,” said Morro. Tapu smiled over the webcam from his bed in Canada and said, “Naanu, it cannot be drawn, it has no happy in it...”
 
Employees too had become ‘cunning’ and ‘conspiratory’. Acts were done to climb a rung, and ‘acts’ were indulged and smiled upon. You were proactive if you showed an ‘ability’ to ‘work around’ people. Managing relationships was a Rs 1.08 crore budget. ‘Getting rid of obstacles’ was rewarded but ‘conquering’ obstacles went unnoticed. The whole dynamics of the work market had changed…. Extraordinary HR practices are no more about resource retention; they are about organisational ethos enhancement.
 
Morro had told Prasad once: “A product has to go beyond the consumer; it has to be good for the environment, for society!” Prasad was setting up a plant in a rural area, but he had not yet planned the housing or the schooling for the families who would live there. Prasad had presented some arithmetic that compelled him to keep the unit price of the end product at ‘x’. Morro felt people came before the product. But Prasad dug in his heels. He could not, would not spend more than he had planned. Some businesses were clearly Prasad’s, and Morro did not want to interfere. 
 
But on another occasion, he had gently pointed out that support to causes must be real, not just theoretic. Therefore, the ability to build successful teams depended on the leader’s ability to inspire efforts towards greater good…. Prasad had nodded but said, “Support and causes and all that is all very well baba, but we need to get our businesses going first. There will be time for charity later.”
 
Charity! No! cried Morro’s mind. This was not charity. This was duty, responsibility. And this is what cast a shadow of uncertainty on Prasad.
 
Now, as he sat thinking in his office, another thought assaulted Morro. Responsibility, diversity, etc., which they never cared for earlier, were demanding attention. But Prasad didn’t think these were important. He hired women, for example, but almost entirely as secretarial help. His own niece who joined as a management trainee after her IIT was discouraged by Prasad. Niece Tula thumped tables with grandpa Morro, who told her, “I can save you, but for how long? Go, fight! These are battles that have to be won; not handed on a platter…”
 
Last week, Morro had lunch with Jutika Bhandari and Nakul Warrier, partners of  ‘Building Leadership’, who were doing some work for MoMart and Ambarish. That was when Nakul made a comment on seeing a clip on Indra Nooyi on the television: “How much has changed! This was a company that judged its CEO by how many percentage points of marketshare he could wrest from Coke. Today, it is about changing the product mix, meeting changing health attitudes and including the developing world in the product planning mix. Nooyi is a transformational leader who is inspiring change at Pepsi…”
 
Vittal Morro: Transformational leader (TL). I like that. Tell me about this animal, do you find them? Grow them?
Jutika: Where do you find them? It could be from within or from outside. We need to look for the TL qualities by going beyond just the set of hard skills. More often than not, they will come with unconventional backgrounds for that is one of the pointers to a TL. But these leaders have a distinct halo you cannot miss. They show up…!
 
Morro then went on to share with them nuggets of his background — how he, after graduating from Oxford, had spent two whole years working as a store keeper and cleaner and fetch-and-carry boy at Selfridges at the behest of his father Chintamani Morro who insisted he work, make a difference and only then come home. And that was how Morro picked up some of the finest nuances of management theory and practice. And now he said, “When I look back, I see a clear pointer. There was direction to my evolution starting with Selfridges. But when I look around here, there is a sense of incompleteness in the picture.
 
“Today, for example, I want the group to be a committed participant in CSR. But getting even participation, is a challenge. My son feels the group can partner some charities for the next five years, but cannot (must not) get into areas where that will need management hours. I am thinking about a leadership for the group that is able to step away from the processes and events, to charting the course it must take...”
 
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But Morro had sought size. That was relevant in the 1970s, 1980s and more in the 1990s when liberalisation threatened him like it did many Indian businesses. He was active in the Bombay Club and had asked for safety nets. “When that did not come, I became aggressive,” he explained. “I began saving Indian brands from being bought out. I became a crusader.  So, today, Morro Group is large... big... But is it healthy-large?” he asked and smiling, went on, “No, it is not. It is like an only child you indulge and fatten, and then wonder where the fat came from!”
 
Nakul: This is typical of the times, Mr Morro. The group, as I see, is facing the archetypal dilemma of many homegrown family businesses in India. The ‘son succeeds father’ model worked in an environment where the most critical aspect of running the business was cornering the right licences. Where mistakes could be corrected and the runway for learning was long because markets grew slowly… Expectations were a function of the market’s potential, which was already stunted by government diktats. 
 
Today, the scenario cannot even be defined, Mr Morro. I mean just think about it. Even as the rest of the world is struggling to avoid a contraction, the Indian market is being buoyed by extraordinary growth! I agree with you, these are very unique times where the leadership too has to be unique!
 
Jutika: Actually, your problem is bigger than it appears. Out there are many start-ups that have taken private equity funding.  Now, your battle is not anymore just your traditional competitors, but also these start-ups. The other issue is that time is finite. Today, time comes only attached to a stop watch. When the time is up, it is up. So, today, it is management on the go…! New business models and management techniques are being tossed around, and the response time is short. The movement from one to another is swift. The decision points are more dynamic. An organisation needs to be geared for this…. 
 
Morro: (Smiling ruefully) That, we are not! I sensed this then in the 1980s and 1990s; a sense that we are moving and the direction is ‘ahead’, but no saying what lies there. Hence, the fear of change is huge. 
 
 
It is such a mixed bag out there. I feel in my bones that business is no more about profits, but about being responsible. No more about convenience products, but sustainable solutions; no more conspicuous consumption, but conscious consumption. And all this requires an attitude, which is not taught, but learnt. Felt. So, tell me how are these learnt? Or are these learnt even? Are these genetic?
 
Sitting at the window on the 14th floor, Morro ran a finger over the long row of books and stopped on encountering his notes on Charles Handy. Opening it to a page he had bookmarked with a used strip of tablets that once contained his statins, he read: Organisations are not inanimate objects but vibrant microcosms of human societies, and those who seek to manage them and work within them must better understand the needs and motivations of the individual people who make up the organisation and comprehend how their collective behaviour determines organisational behaviour.
 
Morro shook his head. Maybe 10 years ago, he agreed with that view. Today, he was in a most disagreeable mood. The employees’ behaviour was a function of its leadership, he affirmed. But, the goal is the world and each of us is bound to enhance it, add to progress, to growth. The case for motivation is over. It’s time to work…
 
Morro was unable to vocalise his angst. The dilemmas of change and anticipated difficulties cast distorted shadows in his mind.
 
He wondered how some firms managed to find a turning point for their leadership. Being a family-managed, family-controlled group, he could not even think of bringing in an outsider. But then, couldn’t he? Morro pondered deeply.
 
Breaking his thoughts, Nakul said, “You have perhaps sensed that it is another big inflection point for the group. You need to assess and enumerate where you want to see the group going, where you expect to see it in five years, 10 years, in what direction, with what ethos, and then assess the skill sets to see if there is a gap. I might even suggest hiring a temporary change management team who will walk with you, manage your vision standing here, and yet help tie the past with the future. As for the teams you have at present, can they be grown? They have to be able to walk the talk and the task. Change needs tough minds, able minds. And you also want risk takers who are not afraid to fail…, who know the art of standing up after a fall.”
 
Jutika stepped in gently with, “This is what we meant by transformational leadership. Start by separating family and management. Continue by preparing them for hard knocks to their egos. We urge professional managers too to drop their egos, the I, which is very similar to the ‘Family’ ego. At another company, the family members resisted change and saw advice as instructions, as orders, and eventually there was a total breakdown of the process so that employees who had a curb-side view of the fights, quit. 
 
“So separating family, the I, from management is important. You have to draw a line between ownership and management. Then again, Mr Morro, your vision needs to be first translated into a business proposition or plan and thus gain shape. It is usually easier to get the translation through professionals, the right kind who have the attitude for progress and advancement, and a clear vision when they see a good plan. The kind who are inherently transformers, not fame seekers.”
Morro felt optimistic, but unsure. This sounds more like a business’ transformation than the leadership’s. Or are they linked, he wondered….
 
Classroom/syndicate discussion
Owners fear loss of ownership. Professional managers, perpetuity. Both fear change
 
casestudymeera at gmail dot com
(This story was published in Businessworld Issue Dated 15-02-2010)


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