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Wednesday, January 25, 2017

Organizational Stage and Leadership Needs – Tata Sons and Flipkart


Guest Post by Prashanth Thimmavajjala
Prashanth is an MBA graduate from IIM Bangalore, currently working in the testing domain and is still trying for an opportunity to crack into the management world from the technology world. He has published multiple papers for PMI conferences and other forums.

Two of the most loved companies in India Tata Sons and Flipkart announced their new leaders N Chandrasekaran and Kalyan Krishnamurthy respectively. Both the decisions were much talked about in multiple forums, especially the decision with Flipkart causing some worry in startup circles. If we look at both these decisions from an Organizational stage perspective, both the decisions seem apt.

Both these firms have decided to bring in a non-founder to steer the firms to the next stage and both these firms are at different stages of organizational evolution. They have decided their next leader as per their stage of organizational evolution.

Tata Sons

The Tata Sons represent India for many of us and there would no one who doesn’t know the company (I have my own personal dream of working in one of the Tata firms before I retire to have that feeling of truly contributing to nation building). Being an extremely large conglomerate of firms from salt to software with complex cross holdings, managing the conglomerate is challenging. The Tatas have been managing this all these years within their family and close investors but this time their leadership decision ran into trouble and they had to get in a new leader. The Tata Sons are a mature conglomerate and running this cannot be done by an outsider or someone with less number of years with the firm. The Tatas have a legacy and a culture of their own and getting an outsider for the top job would mean a disaster. They cannot decide to bring in professional management like how Flipkart did because being in the system for long is key.

The Tata Sons are at a strategic inflection point where they need to rethink on their businesses in few sectors, focus on new sectors, handle legal issues they have been having and their expansion plans abroad. This needs a stronger and better connect to the system in Tata and a deep understanding of their businesses. The top job needs someone whom everyone can trust, someone who knows and connects well to the Tata legacy and someone who is part of the clan within the Tatas. N Chandrasekaran being a long timer with the Tatas and handling one of its largest businesses is easily the best man for the job. Being a close confidant of Tata and being in the system for long time helps in better and deeper understanding of the conglomerate aiding in better decision making as compared to a complete outsider.

Flipkart

Flipkart is undoubtedly the star of the startup ecosystem in India. Everyone loves the Flipkart story of evolution and continues to follow it with much interest. Flipkart has grown from a small startup, now into a “conglomerate of startups” like Jabong, Myntra etc. Flipkart has now reached a state where it needs to go beyond just outsmarting competition from Amazon and the likes to a stage where it needs to grow both organically and inorganically to stay in the game. In recent times, Flipkart has faced some serious trouble in terms of top level exits, funding crunch and devaluation by investors.

Flipkart is now in a stage where it needs to raise more funding to keep the ball rolling but its story is not very attractive to the investors now. Flipkart has reached a strategic inflection point where it needs to rethink its theory of business to keep growing as offering deep discounts can only bring them so far. The founders Sachin and Binny Bansal have got Flipkart to this point and this change in the strategic path needs new leadership – more professional and equipped.

Founders are generally more emotionally attached to their dream and might refrain from taking tough decisions regarding funding, acquisitions, downsizing and a whole lot of things which are needed to grow in size. This is one of the reasons most startups in the Silicon Valley change the leadership to more professional management after the startups reach a certain stage as founders are not very equipped to take decisions needed to take it to the next level and grow. So there is nothing new that Flipkart was doing but there is some tension as it is happening the first time in Indian startup space where founders were replaced at the top.

In the Flipkart group, Flipkart is truly the cash cow and the others are still growing and hence it is necessary to make it a strong firm to keep the entire group running. Flipkart needs to ready itself for public listing anytime soon to raise the additional funds it needs to grow, it might also give exit options to the existing investors. This calls for making the financials of Flipkart look strong and would need harsh decisions to improve margins and achieve a sustainable growth rate.

Flipkart’s growth will surely fuel the growth of other firms of the group by what is called as conglomerate discount in corporate strategy parlance. Once Flipkart seems strong and goes public, it will make it simpler to take the other group companies public as well or even take the entire group public. The additional funding will also help in making decisions regarding mergers and acquisitions of new firms into the Flipkart group. To reach this stage Kalyan Krishnamurthy suits best with his background in finance and online retailing.

A leader is meant to be the right fit to the organization at its current state and must be a person with the caliber required to the next desired state and both these firms have demonstrated how the stage of the organization decides the type of the leader it needs to move it to the next stage.

Thursday, January 12, 2017

Strengths Finder 2.0 by Tom Rath (Book Review)


A lot of discussions and research is available on how to find one’s strengths and weaknesses. Most of the authors focusses on improving your weaknesses. From schools to interviews, strengths and weaknesses are a topic. Another school of thought vouch for working on your strengths rather than weaknesses. In this blog post, we review such a book – Strengths Finder 2.0 by Tom Rath.

About Tom Rath

Tom is a consultant in the domain of employee engagement and leadership. I think most of his acclaimed work were done while he was associated with Gallup. Interestingly, most of this thoughts and research are associated/built based on his grandfather psychologist, Donald O. Clifton. Donald is acclaimed for his stress on personal development based on strengths rather than weakness. Tom has written nine books; and is noted for his works like How Full Is Your Bucket and Strengths Finder.

Strengthsfinder 2.0 Assessment and Themes

This book follows a unique method written based on a survey. Second edition is updated based on an upgraded version of the survey. The author claims that based on the results from first edition and further research, he has trimmed the survey, yet giving a more accurate and personalized result
The assessment is a set of questions to be answered in a short span of time. The author suggests not to over think and instead select the answer which comes to mind first. Based on the assessment, you will be given the top five traits or strengths that you should considering developing and banking on. Based on his research and assessment results, author has developed 24 broad strengths/themes. This ranges from the likes of Communication to Learner to Woo.
Throughout the book, one thought that gets re-iterated is that our society celebrates those winners who triumph over they lack of natural abilities more than those who win based on their natural talents. For example, it’s a common practice in our education system to ask children to concentrate more on what they are weak in rather than encouraging to build on those they are strong at.
The author even gives a figurative formula to stress this idea. Strength = Talent X Investment. We can try to increase talent or investment; but ticking the right combination is the key. Later the author gives some thoughts on how to make use of the strength themes. The second part of the book gives ten ideas of action for each of the themes and also certain pointers on how to interact with others having such traits.

Playing Devil’s Advocate

To be honest, I felt it too vague to read both the assessment results and ideas of action. For example, one of my core strength is finding harmony (which I feel is debatable). The ideas of action given are create a forum in which others will feel they are heard. This is more or less like a technique taught in negotiation/moderation which is in-line with his so-called – Harmony strength. Another thing I found is that they are so broad that, it would be difficult to find anything practical out of it. Overall, I agree it gives a sense of what your strengths could be and what you can do to foster it.
The online resources that the book boasts of are a bloater. They have just slice and diced the content of book/theme descriptions into various formats. Strengths Insight and Action-Planning Guide is nothing but the explanation of your five strength themes and so is the Strengths Insight Guide.
Overall a one-time reader; not something which provides as it boasts of.