People@Work. When leaders are cut to size!

Enterprises can humble leaders just like democracies cut politicians to size. Boards can take CEOs to the zeniths of organisation glory when they appoint them and humble them by curtailing their powers when they want to dethrone them!

If you want any of your senior leaders to leave, would you simply ask them to move on or make them feel less important so they quit on their own?

“It’s a parking role. The writing is on the wall. I know the title says ‘Vice President-Public Sector’, but I can hear everyone in the office laughing at me, we know PSUs never buy our services” cried my former colleague, who eventually resigned.

“I have a cabin, no reportee, no work. The regular fat salary cheque is the consolation, but also a threat when I hear of the layoffs these guys are doing in the US,” shared my friend who works as a director for a large ERP player.

The corner rooms of large enterprises have plenty of such sagas where leaders once celebrated get hibernated for various reasons.

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Role and Mandate

“What’s the mandate?” is a favourite question of CXOs when we interview them for new roles. Many leaders who want to leave are mostly frustrated that their current role lacks a strong mandate. These mandates keep changing based on the organisation’s performance and leadership context; in many cases, leaders create a mandate. In some organisations, don’t we get confused about whether the role is powerful or the role holder? Naturally, some roles, such as CEO, CFO, Sales Head or Marketing Head, are influential depending on the industry. However, in many cases, the person donning the role makes a huge difference, even though the title may not sound so. There might not be straightforward answers as to why these anomalies exist, but in most organisations, it points to the relationships the role holders have within the firm, and the length of tenure.

Family-Owned Firms

Depending on the employer they choose to work with, leaders are well aware of the boundaries they work with, and many of them are quite accustomed to them.

About 73 per cent of the top 500 companies listed on BSE are family-owned, while almost half the companies on Nifty are second or third-generation family businesses. So, there must be many publicly listed companies CEOs who already know the nuances of working with multi-generation family members.

“These are the three guys who built our enterprise, find a way to work with them, my promoter said during my interview,” said a CEO who joined a consumer durables company. “Initially, I found my hands tied as these three always had the ears of the promoters, but then I realised that there were more important battles in the organisation I should choose to fight.” He adds, “However, I have to admit that in every team meeting, I felt someone was watching me, and it took me a while to get adjusted to that eerie feeling.”

Family-owned enterprises want competent leaders who give them returns, but they have their own unique ways of keeping their kith and kin on the board or in some quasi-C-Suite roles to ensure the professionals don’t exceed the brief.

The CO-CEOs world

Picture this: many young leaders aspire to be in the corner room one day, and when D-Day arrives, if they are asked to share the role with another CEO and are called a Co-CEO, imagine their plight. Unilever, Oracle, Blackberry, Goldman Sachs, Amway, Chipotle, and SAP have all tried this with varying results. Salesforce tried it twice in three years in recent times. Harvard Business Review’s study found that 87 of the 2,200 S&P and Russell companies, listed from ‘1996 to ‘2020, had co-CEO status. It’s obvious to infer that other than transition cases where one is eventually moving on, the Co-CEO structure serves more as a checkmate than a complementary leadership solution. According to HBR, despite the limited sample size of companies adopting a Co-CEO structure in 25 years, 60 per cent of them outperformed. Just like coalition governments in India, which have delivered higher growth in the past! How ironic!

The MNC Maze

If you work in a multinational corporation, you will be familiar with regional power centres like APAC, EMEA offices, or global headquarters in the Americas. The country heads need to balance their equations with each of these power centres even if they don’t report to any of them directly. In the revolving chairs of MNCs, one doesn’t know when the boss will change next, and the current relationships decide where one’s future lies. Hence, some global conferences become internal networking sessions where one gains or loses when the winds change. During my employment days, I used to land a day early to the company’s annual events to ensure I got my breakfasts and lunches with the people in power and built relationships that eventually acted as insurance during the turbulent times.

The famous way MNCs disempower their leaders is by transferring them into new roles that have no influence or impact or to new regions in the name of promotions where the scope is almost cut to nothing. Some are even asked to perform individual roles to keep their jobs.

Some MNCs make many business leaders in India report to global CXOs, making the Indian country head responsible only for signing cheques and ribbon-cutting rather than any meaningful impact.

Polycrisis world

Leaders who reach the totem pole need to keep their aspirations fluid as in the era of ‘polycrisis’ and trust deficit, boards will react fast affecting the carefully built empire and self-image of CXOs.

If your talent, grit and timing took you to an empowering leadership role, please budget for some unknown headwinds or bad luck that can sometimes cut you cruelly to size!

(Kamal Karanth is co-founder of Xpheno, a specialist staffing firm)