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Leadership Is More Than A Title: Lessons from Tata

Entrepreneurship
Oct 28, 2016

Leadership Is More Than A Title: Lessons from Tata 

There are many kinds of leadership styles out there...

The Autocratic Leader takes the reigns and does not let go. He uses rules, guidelines, and policies to trickle his decisions down the ranks. It's his way or no way...

The Democratic Leader allows for input from his team and makes decisions based on collective ideas while still taking responsibility for them. With this type of leadership, communication is key.

The Transformational Leader inspires and motivates their people to bring change, to be the best they can be, to use their freedom responsibly for the growth of the organisation. They set challenging expectations, give greater guidance, and propel organisations forward.

The Laissez-Faire Leader, as you can imagine, sits back and hands over responsibility to the team. The team is given free rein to find their own direction.

For each of these leadership styles, you can find real-world examples that work and some that don't.

Today, we will examine another style of leadership...

The Charismatic Leader builds or transforms an organisation around his own personality and beliefs. The beliefs of his organisation are so entrenched in the person of the leader that a smooth transfer of leadership can be next to impossible.

That's trouble with charismatic leadership. Leadership cannot be bequeathed easily.

This, or a version of this, is what seems to have happened at Tata Sons. The company's values are so intertwined with the Tata family that passing leadership on to a non-Tata caused a catastrophe.

But there's a lesson in this. And an opportunity to study whether leadership can be passed on to the next generation without rocking the boat too much.

Disney had a long fallow period after the death of Walt Disney. Instead of looking to their new leader, Disney employees kept asking, 'What would Walt do?' This only held the company back.

Apple has also had a hard time moving on after Steve Jobs. People now look at the company and say, Steve was a visionary. Without him, Apple and its products are not the same.

When, after twenty years at the helm, Ratan Tata chose to step down and pass the leadership of a company that bears his family name to a man who does not, he was breaking a long tradition of charismatic leadership.

And now, with Cyrus Mistry's dismissal, perhaps we can see the trouble with charismatic leadership.

Leadership is more than a title...

After Walt, it was more than a decade before the Disney ship righted itself. That was probably because people could not move on from Walt's larger-than-life leadership.

Tata managed to give up his post and replace himself. But perhaps - in addition to preparing his people for change - he too needed accept a new way of doing things.

To pass on leadership, it is not enough to donate a title. You must find a way to bequeath the power, authority, and loyalty that goes with it. If you have used your twenty-year stint at the helm collecting these things, it is only natural that it gets accumulated in your person.

It is only natural that people will ask, 'What would Tata do?'

In fact, Cyrus Mistry claimed that, at one meeting, Tata Trusts' representatives stepped out to call Ratan Tata for guidance. He claims he was 'powerless' as chairman.

Perhaps the best guidance would have been, 'Talk to your chairman.'

Mistry felt powerless as chairman. Without enough support in Parliament, even the prime minister can't make changes. But we're talking about a corporation. While there is a place for democracy in a corporate organisation, a divided board will not help the company move forward.

It takes time, and it takes mistakes...

When a charismatic leader passes on his mantle, he has to allow the new leader time to consolidate his power, disseminate his vision, and effect change. And he has to trust that the changes the new leader makes will build on his legacy.

That doesn't mean he only trusts him when he's hitting sixer after sixer. He trusts him when he makes mistakes and blunders and 'non-performs' as well.

Tata has an advantage that Jobs and Disney did not. They could not offer guidance to their successors. This is something that perhaps Tata could have done...or at least done a better job of.

Remember why you picked him in the first place. Not because he was infallible, but because he had the potential to do great things. Sacking him for his failures is a mistake, and it makes it seem like you do not allow mistakes. Which means the team won't take risks, and growth will stall.

In his letter to the directors of Tata Sons, Cyrus wrote, 'Prior to my appointment, I was assured that I would be given a free hand. The previous chairman was to step back and be available for advice and guidance as and when needed.'

That is in fact the perfect way to pass on the mantle. But it is also very difficult for a leader to give up control.

A new way of thinking needs a lot of new buy-in...

Whereas the outgoing leader has a responsibility to support the new leader, the inheritor must realise he's inheriting an established tradition. To change things, he needs to get the team to trust in the new vision.

Mistry had to make big changes in the organisation. After all, that's why he was brought in (one would hope). A new generation, a new context, a new way of thinking...to make the tough decisions that lead to growth and evolution.

But bringing change in an organisation as big as Tata Sons is not just about making decisions and enforcing them. It requires people to believe in the new direction. And open, honest communication can make that happen. You can't simply enforce authority, you must earn it. You can't really inherit power, you must build it.

Mistry was making big changes at Tata, changes that aligned with his own vision, but contradicted those before him. Could these have been resolved with better communication?

When a charismatic leader passes on his mantle, the predecessor and the successor both have a tough task to follow. But it is not impossible.

To do it successfully, charismatic leadership must be converted, through efforts by both, into a collaborative leadership. A leadership where the wisdom of the past and the dynamism of the future can come together to build the organisation.

Is this possible? What do you think? Have you seen examples of successful transitioning from charismatic leadership? Let us know...

Image Source: Yuganov Konstantin/Shutterstock.com

 
 

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18 Responses to "Leadership Is More Than A Title: Lessons from Tata"

KRIPPSS

05 Nov, 2016

Dear Anisa Thanks for your deep insight on the Subject which is actually complex but the views are well timed though these are a perspective from the prism of 'who's right and Who went wrong' ,which I feel different about.Madam,Ratan Tata is a legend who has proved himself beyond doubt and`set up Businesses which spell ideals of HRM,Nationalism,Human values and global leadership.Lets not be judgemental and end up comparing two great leaders,since they performed in different generationsmdiffeterent times and amongst different challenges and circumstances...Colonel Kirpal S

Like (1)

Jerrison Johnson

04 Nov, 2016

" Tata trust's director steps out of the meeting for advice from Ratan Tata" it's show that mr. Mistry even after four years he can't managed, his board members, How the hell , he will manage business, .

Avneesh

03 Nov, 2016

Your article on Tata reminds me of Vivek Kaul's article that explains how news papers and news channels makes many stories without sufficient insight. Someone connects it to Mulayam and you have connected it to leadership and succession planning. Well what happens in top management never comes out in the original form. The reasons that come out are moderated to ensure that brand image of the company as well as the departing manager is protected to the extent possible. So, your story is good for a lecture, but it would not be good to connect it to such an event.

Dr. Mohandas Bhat S

03 Nov, 2016

It was a realistic well thought analysis of what is happening in TATA. The TATA leadership should have waited for some more time , given chance to Mistry for seeing the fruits of his changes. During this change the collaborative leadership would have helped during this long transformation. Change is required everywhere. During the changes there are ups and downs here and there. That is experimentation. Experimentation is allowed in scientific management. Success is only comparison of ups with respect to downs.

Srinivasan

29 Oct, 2016

Many companies have done this successfully. Infosys.....from NRN to Nandan to Kris to Shibulal and now to outsider Sikka. L&T....have been doing this for quite many years. HUL....ditto

Pandurang Narayanswamy

29 Oct, 2016

You got it bang-on. Ratan Tata could not let go......He retired but still wanted control. That is why he kept influencing other board members. Influencing without authority is a skill which most managers need to develop. However, a charismatic leader like Ratan Tata had a 'dictatorial' influence over a lot of his ex-board members even after his retirement...and worse he decided to exercise this influence through different means. This is the key difference between Ratan Tata and Narayanmurthy in how they handled their outside successors........and how they handled..."not-in-my mirror-image" successors......Maybe a topic for another article.

T.M.RAMANI

29 Oct, 2016

Merely being a Charismatic Leader does not ipso facto prove what all he does is correct. For example Mr.Nehru was a charismatic leader. By hindsight now everybody says what all he did was damaging our Country permanently. "When a charismatic leader passes on his mantle, he has to allow the new leader time to consolidate his power, disseminate his vision, and effect change. And he has to trust that the changes the new leader makes will build on his legacy."- Quite true. But merely dubbing Mr. Ratan Tata as charismatic leader is wrong. He is a visionary and Mr. Mistry is definitely not. In modern era time flies very fast and decisions have to be taken in a jiffy. Mr. Mistry cannot fit in such a situation. He only wanted to establish that he is a charismatic leader and better than Mr.Tata and that what all Tata did was wrong. This one point agenda is not good for a corp;orate empire and its success. It will lead only to a downfall and perish in the long run.

Jayanti V S N Murthy

29 Oct, 2016

Dear Anisa Thank you for the newsletter and your article . While different types of leadership well explained in your article,was it so necessary to drag in the name of Ratan Tata and the ongoing tussle in the Tata Board while legal proceedings are on and a lot still left.Moreover,not everything clear on the tussle as such as to draw any conclusion or gauging a management style. Thank you.Regards, Jayanti V S N Murthy

Zarir N Panthaky

29 Oct, 2016

Very good essay Anisa, well thought out, couldn't have been put in better terms. I appreciate the sentiments of the article.

samar chandra mondal

28 Oct, 2016

Agreed that Leadership is more than a title in any organisation. In today modern management system, The Autocratic Leaders are most dangerous to any organisation due to the following reasons-- 1)To day simple modern management system is highly successful due to the utilisation of high tech communication and informations technology .Any time any person can check what happening and status in the organisation from a long distance. 2) Effective communication system is a back bone of any organisation which reflect the human/leadership intelligence and character. 3) Automation system . 4)Transparent Leadership is also play most important role in the organisation . 5)Up to date knowledge of the world new business and technology. 6) Matching of vibrations between first commend and second in commend of the organisation in their short and long vision.

Ganesh

28 Oct, 2016

I think Infosys is a good example.; where the old leadership passed the baton to the new leadership with minimal heartburn. 

Satyendra Nath Chatterjee

28 Oct, 2016

It obvious that a communication gap was created between Tata and Cyrus. Tata was somewhat anxious about the big decions of Cyrus and this young leader was over confident about his socalled changes. The most surprising factor is the dismissal of Cyrus after a long four years of his reign only when Tata realised that his choice was not so smart to move the organisation in a right way which resembles Tata phylosophy,

Russy Master

28 Oct, 2016

There's another issue here in this Tata episode. Ratan handed over the mantle to Cyrus, but probably the other old fogies were not quite prepared to play ball with the young Cyrus. When Ratan took over from JRD, he ousted Russi Modi, Darbari Seth and others on grounds of age. Maybe Cyrus should have got his own young team as well. Generation gap is another issue here. It seems that instead of being the captain of the team, he was the trainee who was being evaluated by the old board. If the other board members had better ideas, why didn't they suggest towards the Plan 2025? And though we will never know the real truth, Ratan has eventually been exposed for what he really is - an old fogie who wants his way in everything and not quite willing to accept his blunders. Sad, truly sad.

Rajeev Arora

28 Oct, 2016

Tata Group strictly lives by the 'Tata Code of Conduct' and this could have been triggered by a conflict with the same. Some of Anisa's views are correct but she is too quick to assume 'charismatic leadership' - need to understand this more deeply :)

Raja Rao Gariki pati

28 Oct, 2016

Well covered article. The problem of change of leadership in a company,country or a party is the same in all countries,more so in India because of simple reason that most people consider it following the leader is safe and the leader also feels happy for his ego is satisfied irrespective of the fact his actions are in the larger good or can be continued by future leaders. The world at large is facing the problem of visionary leaders, however great the country may be,like US today. As a matter of fact , the more ideological commitment and the intelligent the more differences of opinion and cleavages in the organisation. Afterall MAN as a whole needs to evolve from animal characters and instincts to a higher level , a very very slow process of evolution.And this type of differences in adjustments do crop up every where for many a times.

S A Narayan

28 Oct, 2016

In transitioning from a charismatic leader with a lifeline of 'advice available when needed',the fly in the ointment is usually the remote authority available to the advisor., as in this case of the Tatas. It will only work if the advice seeker has the freedom to jetison the advice, if its not relevant. Advisors' role works only when its an input before decisions are taken, not as an enforceable dictat.

Like (1)

Sudhir Mahale

28 Oct, 2016

The directors of the board should have access to Mr.Ratan Tata only through Mr. Mistry. When Tata trust's director steps out of the meeting for advice from Ratan Tata, Mr Tata should have asked to get it from Mr.Mistry. By advising him Ratan Tata had finished Mr Mistry in one stroke.

Like (1)

Ravishanker

28 Oct, 2016

Anisa : Excellent and timely article ! You echo my sentiments all the way. The figures speak for themselves. Cyrus had lot of garbage cleaning to do but unfortunately Ratan Tata forgot that he was young once. If warren Buffet had been on Tata Sons Board he would approved Cyrus' actions in the last four years.

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