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BW Businessworld

Right The Wrongs

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Naren Kant's experiences at Delana India truly represent a leadership crucible for him.  He has few choices before him and those represent diagonally opposite stands. From buying pirated operating systems for company machines to fraudulent misuse of SEZ status by a subsidiary company, Kant has much to worry about. When he took the issue to the Board, which is where the operation ‘clean up' has to start, one member responds that evading tax is part of running a business, and even elevates it to a ‘level-playing field'.

Kant's situation reminds me of what Jim McNerney faced at Boeing as its CEO. Boeing was going through a serious crisis of confidence and was in the midst of scandals. The Department of Justice was probing its misdeeds including: a) improper acquisition of thousands of pages of rival Lockheed Martin's proprietary documents; b) illegal recruitment of senior Air Force procurement official while she still had authority over billions of dollars in other Boeing contracts, and more. McNerney sized up the situation, and recognised that how he handled the crisis would be a watershed in his leadership and, at the same time, provide him and Boeing an opportunity to transform the company's culture around ethics and opportunity. McNerney did not waste his time contesting in court, but quickly acknowledged the wrongdoings by his company's senior executives and paid up the $615 million in agreement to settle.

Kant, too, can determine his company's future culture. Easier said than done, of course. An organisation's culture is often defined as behaviour that leaders practice and tolerate. Unfortunately for Kant, the leadership of his company in the past has both practiced and tolerated wrong doings and perhaps even came to believe that they owed their success to such ‘smart business practices'. This is a classic case of mistaking success as ‘because of' rather than ‘in spite of' certain actions.

Kant's discussions with Alex presents a whole range of issues. Alex gave psychological explanations — "value system takes precedence over personality", "tendencies in personality that tend to be active or dormant" and "even honesty is a tendency latent", and the like. Understandably, Naren is not satisfied.

Discussions with Kaustubh, Kant's HR head does not help him either. Kaustubh goes about counting many reasons with the objective of helping Kant understand that the problem is "temptation of consideration".

Kant is alone — his colleagues do not seem to share his high standards of morality and ethics. It is a crisis of judgement for him. Such situations are not unusual for leaders in their pursuit of progress and success for themselves and their organisations, particularly in an environment of roller-coaster ride and cut-throat competition. Corporations that hire high-profile officials retiring from government service do so to use their rich experience and ‘competence' and, even more importantly, ‘rich connections', so that the machinery could be influenced in the desired direction. Noel Tichy and Warren Bennis, both internationally acclaimed leadership gurus, wrote a must-read ‘bible' on leadership for managers and titled that book Judgement. They drive home the point that leaders' lives are full of judgements: about strategy, people and crises. They make a powerful observation and reinforce the same throughout their book saying, "with judgement, little else matters; without it, nothing else matters!" Kant is faced with a crisis of judgement; but then that is also an opportunity to redefine the culture of the organisation and emerge a great role-model corporate citizen. Like McNerney, how Kant handles the challenges, will determine the future course of success for the company.

Look at the landscape of many large IT companies whose claim to fame includes being ethical and you will recognise:

They cook up the attrition data presented to the analysts to paint a picture of stability;
They lay-off thousands during downturns, but claim to be getting rid of non-performers;
They tweak and fudge the résumés of employees to present to the clients to show that they have plenty of skills.

Where do you place them on the yardstick for integrity? The argument is often the same: everybody does it, so what is the big deal? Or, does success forgive all these behaviour and provides legitimacy?

Kant may be alone, but leaders do not get agitated by this loneliness. As much as there are Satyams, Andersons, Enrons and Global-Crossings, there are several others who refuse to profit from grey areas but draw the lines clearly and make ethical behaviour non-negotiable. Kant must do what McNerney did: own up, clean up, get the right people on board, and not play by the Jekylls who Hyde by night! Leadership is neither easy nor for the weak-hearted.

C. Mahalingam is executive vice-president and chief people officer with Symphony Services Corporation

(This story was published in Businessworld Issue Dated 11-04-2011)