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An evolutionary view of leadership

Yesterday, The Hindu Business Line carried my latest column in which I explore the relationship of leadership to various kinds of wages. Link: An evolutionary view of leadership

Full text follows:
A casual perusal of the management section of any bookstore would suggest that ‘leadership’ is the most desirable goal that people have for their lives. This may indeed be true, but evidence in the real world suggests that there is more to leadership than meets the eye.

In the real world, leadership is often bestowed upon an individual who is most likely to work in the interest of the group he leads, even if it means sacrificing his own well-being. While, the first-half of that statement is rather clichéd, the second part is the one that is more interesting. It is our tendency to choose leaders who will not work for their own self-interest that leads most people to actually not want to be leaders themselves. They will gladly be followers and reap the benefits of having a leader who will work to maximise the wellbeing of his constituency, rather than step on the pedestal themselves. This argument is also found in Plato’s Republic.

Plato’s Republic presents this idea through an argument between Socrates and Thrasymachus in the course of which Socrates says: “No one willingly chooses to rule and to take other people’s troubles in their hand and straighten them out, but does ask for wages… In a city of good men, if it came into being, the citizens would fight not to rule. There it would be clear that anyone who is a true leader doesn’t by nature seek his own advantage but that of his subjects. What kind of wages is Socrates referring to? The answer is — money, honour or a penalty if the individual refuses to lead.” (Source: Justice and the Leader, by Plato from Republic Book I – Hackett Publishing, 1992)

Leaders and wages

Now, this seems to suggest that people only become leaders in order to get the above kinds of ‘wages’ and for no other reason. In other words, if there were no ‘wages’, no one would ever want to be a leader. This may be a bit far-fetched. Surely, history has shown us enough examples of ‘wage-less’ leaders such as Gandhi and Mother Teresa. The idea of ‘servant leadership’ developed by Robert Greenleaf suggests that a leader’s role is purely to serve the needs of his constituency and not to increase his personal power or glory. In other words, for such leaders the wages, if any, are purely incidental.

Is there any way to reconcile these two schools of thought — one which suggests that all leaders work for tangible or intangible ‘wages’ and the other that suggests that leaders should only serve their followers and have no other goals? It may be instructive to view the concept of leadership as an evolutionary hierarchy. At the lower end of the hierarchy are leaders who are in it for the wages. Needless to say, they too serve their followers, but do so with personal goals in mind. As the leader evolves over time, the marginal utility of wages would decrease and finally reach a point where he demonstrates the qualities of a classic servant leader who is focused on the needs of others.

Servant leaders

Examples of such evolution are easy to find, particularly among business leaders who after many years of building great companies move on to set up charitable foundations that are not profit oriented (the Bill Gates Foundation for instance). In between these two extremes, there could be many other variants with differing ratios of ‘wage’ to ‘wage-less’ orientations.

Viewing leadership in this manner, as an evolutionary ladder, also helps us resolve Plato’s problem of people not wanting to be leaders in the first place. The initial steps of this evolutionary ladder allow and encourage wages, thereby ensuring that people are motivated to take up responsibilities that they would have otherwise shirked, and the higher levels of the ladder are for people who are not in it for themselves.

The key thing then becomes identifying the right kind of leaders for the right kind of roles in society. An example of how things go wrong when there is a mismatch between the role and the wage orientation of leaders in that role is the political leadership in this country which has long been tarnished by cases of corruption by individuals who seek personal ‘wages’ over the larger good . On the other hand, middle managers in most businesses belong to the ‘wage oriented’ category, and they certainly seem to do justice to their roles by both maximising their personal gains as well as achieving organisational goals.

In conclusion, it makes sense to allow and embrace both wage oriented and non-wage oriented leadership, provided that the extent of wage orientation in the individual matches with the leadership role that is on offer.


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The long tail opportunity

Today, The Hindu Business Line is carrying my latest column in which I explore ‘long tail’ markets, a concept that was first made popular by Chris Anderson at Wired magazine. Link to the article on the Business line site: The long tail opportunity.

Here’s the full text.


We live in a world of infinite choices. Yet traditionally, mass media and mass marketing have always trained their attention on ‘hits’. The reason why they do this is the prohibitive cost of distribution of goods and services. Thus, an average bookstore owner needs to decide exactly which titles to stock in order to optimally monetise the limited shelf space that he has available. In other words, he needs to clearly identify the ‘hits’ which would s ell enough copies to justify their existence on his shelves.

This notion of ‘hits’ extends to all other types of products — music albums, films, fashion, retail stores and so on. So is there a market beyond these hits? Traditional wisdom would suggest that ‘non-hits’ is not a market worth chasing. The facts, however, prove the opposite.

With the advent of the Internet, limitations such as distribution costs and shelf space have ceased to exist. Thus, an can offer an unlimited choice of books by an unlimited number of authors that traditional bookstores cannot offer because the sales of such books would not make up for the cost of printing and distributing them. In theory, Amazon can make a book available on its Web site even if less than 50 people eventually buy it.

The long tail as a concept was first elucidated by Chris Anderson in his bestselling book by the same name. The long tail refers to the tail of the demand curve where infinite choices exist. The head of the demand curve consists of all the ‘hits’ which are very popular, and the tail extends infinitely to cover infinite ‘non-hits’, i.e. products with niche consumers. Earlier, marketers ignored the tail because they did not have the means to make the products in the tail available to their audiences, but today the Internet enables them to do so profitably. An analysis of Amazon’s sales by Chris Anderson indicated that a large proportion of its income actually came from obscure titles and not bestsellers.

Mass customisation

One major advantage of using the long tail benefits of the Internet is that it enables producers — of products, content and so on — to offer truly customised products to their target group. Apple’s iTunes, for instance, can offer songs by totally unknown artists who may not have a market in traditional mass media. YouTube offers small filmmakers the opportunity to showcase their content to the whole world. Self-publishing tools such as blogs allow you to write about extremely esoteric topics and still have a global audience for your offering.

The tail of the demand curve explains why small budget films such as Khosla ka Ghosla and Bheja Fry managed to become ‘hits’ in the face of competition from traditional big budget films. These smaller films managed to find an efficient distribution channel (multiplexes that screen many movies and hence diversify risk) to reach their small target audience (possibly educated urban youth who frequent multiplexes and prefer meaningful cinema to blockbuster entertainers). Such examples also prove that to tap into long tail markets, the Internet need not be the only medium.

The Indian context

Is Indian business geared up to the long tail opportunity? Sadly, the answer seems to be a big no. Not enough companies are actively using the Internet as a significant distribution channel for their products. In a market with about 50 million Internet users that is growing faster than ever before, it is critical for companies to have a significant footprint in the online world too.

Some players use the Internet as an online replica of their offline offerings. Big retail chains have launched such e-commerce portals that mirror their store offerings. A better strategy would be to use the Internet to purely tap into long tail markets. Companies in the financial services space can allow their customers to buy customised products that would otherwise cost a lot to launch due to the prohibitive costs of training intermediaries (this sector is today dependent on intermediaries). Telecom companies could use the Internet to launch a number of niche tariff plans. (I’m imagining a slider-based interface that allows me to precisely set my rental, STD, local calls and SMS tariffs).

The traditional argument against such ideas is that you need a critical mass of customers to launch a product. Yet, the magic of the long tail is precisely the fact that you are targeting customers who are not usually on your radar, but rather the small number of customers (which we could call micro-segments) who buy niche offerings. Multiply an infinite number of such micro-segments with the small volumes associated with each micro-segment and you have potentially huge revenues. The possibilities are endless at the tail of the demand curve and it can no longer be ignored in the midst of the noise generated by ‘hits’. What remains to be seen is how innovative we can get with tapping these micro-segments of the market.

(The writer, an alumnus of XLRI, works with a multinational financial services company.)

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Leaderless groups – a case against hierarchy

My latest article in The Hindu Business Line – Leaderless groups – a case against hierarchy. Full text follows:

In his treatise Dastambu, Mirza Ghalib documents the events in Delhi at the time the revolt of 1857 broke out. He writes: “Band upon band of soldiers and peasants had become as one, and far and near, one and all, without even speaking or conferring together, girded their loins to their single aim… City after city lies open, without protectors, filled with men who have none to watch over them, like gardens bereft of their gardeners studded with trees stripped bare of leaves and fruit.” (Ghalib – Life, Letters and Ghazals; Ralph Russell; Oxford University Press 2003)

While Ghalib’s political leanings are not the subject of this article, what is interesting is his view that the men behind the mutiny were leaderless and hence not worthy of being taken seriously.

Are there any examples to prove that a leaderless group can actually lead to efficient outcomes? Can independently-deciding individuals help a group achieve its goal?

History suggests that in certain situations leaderless groups can indeed achieve a stated objective. Leaderless resistance movements such as guerrilla warfare are a good example of this. Terrorists too tend to operate in independent cells (and not hierarchies). This probably explains why they manage to escape from beneath the eyes of hierarchical intelligence agencies.

Key advantages of a leaderless group include the fact that there is no centralised command and control system, which is vulnerable to attack. Each small group or individual behaves independently based on some shared values. This means that the group is not burdened by traditional hierarchical chains of command, bureaucracy and red-tape in its decision-making. Additionally, affinity of group members towards the cause is likely to be much higher since there is no central authority who forces membership and neither are there any negative consequences of giving up membership. In other words, only truly passionate individuals would aggregate in such a group.

Clearly, leaderless groups are structurally efficient. Are they functionally effective too? In the best-selling book The Wisdom of Crowds, James Suroweicki argues that large, independent groups of people are smarter than an elite few (leaders/ experts). For instance, on Who wants to be a millionaire, audience polls got the correct answer 91 per cent of the time, while the `phone a friend’ experts got it right only 65 per cent of the time. He identifies four prerequisites for a `wise’ crowd — diversity of opinion, independence, decentralisation and aggregation. There must be a diversity of opinion within the group, which is independent of the views of other members. The group must not have any central chain of command and there must be some way of aggregating various individuals’ viewpoints.

The Wikipedia model

Wikipedia (a freely editable online encyclopaedia) is a good example of tapping into the wisdom of crowds. Individuals across the world collectively edit articles to produce content that is by and large of very high quality. There is, of course, the stray incident involving a writer editing an article to depict a deliberately biased point of view. However, Wikipedia does have a core team of editors who scan content for such anomalies. Thus, in effect, the people who contribute to the Wikipedia project are like a leaderless group, which is loosely monitored by a core team of editors.

An interesting thought experiment to conduct would be to evaluate whether such a model can be extended to other kinds of organisations. How could one structure an organisation to tap into the wisdom of crowds? Needless to say, leaderless groups are not suitable for certain kinds of organisations — for instance, a manufacturing organisation would clearly need a highly supervised environment. However, for organisations whose main output is knowledge (software, media) a leaderless approach does seem to be an interesting alternative. Open source software movements clearly show that people don’t have any hassles creating intellectual property free of cost — with little or no supervision — if they believe in the larger cause.

Purely from a human psychology perspective, a group with a `leader’ necessarily means that one individual becomes bigger than both the cause as well as the other individuals in the group. While this is good in a political cause (like apartheid) where it is important to truly inspire people, it may not be particularly useful in a more everyday cause, like a company that makes a product or service. In the latter, having overarching leaders can lead to harmful political behaviour and other efficiency-dissipating activities that can lead to drop in motivation levels. On the other hand, people are happiest when they work for causes (not people) much larger than their individual selves. In fact, offering work as a service to the Lord, without worrying about one’s ego or the end result, finds support in the Bhagvad Gita too. Maybe, it’s time organisations experimented more with leaderless set-ups (perhaps within individual divisions if not entirely). History certainly shows that it can work well in a number of contexts.

(The writer, an alumnus of XLRI, works with a multinational financial services company.)

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Interactive Brands – featured in The Hindu Business Line

Today, The Hindu Business Line’s Brand Line supplement carried this article written by me. Link to website: Interactive Brands

Full text follows:

Today’s young adult spends significant amounts of her time using the Internet. The Internet has become the dominant medium of keeping in touch, networking, sharing views with people all over the world, researching and getting work done (if you are a knowledge worker). The membership figures of prominent social networking sites such as Orkut and Facebook is indicative of this undeniable trend.

The young adult of today’s world is hyper-networked, interlinked to many more people than before, and part of many more conversations than ever before. Marketers who are today selling their brands to a spectrum of target groups of which such hyper-networked individuals constitute a small but significant chunk will realise (as these individuals age) over the next 10 years that the entire marketplace has turned hyper-networked.

Are brick-and-mortar companies prepared for this change? I doubt it. The difficulty of `selling’ to such hyper-networked individuals is that they are highly sceptical of advertising, branding gimmicks and PR spiel. This group tends to form and create opinions through n-way conversations that take place on the Internet through blogs, social networking sites and e-mail. Such communication is not just text-based – it could even take place through videos (YouTube), images (Flickr) and voice (podcasts).

The important feature of these conversations is that the information they contain is viewed with much more trust, primarily because such conversations do not have a hidden profit motive. The equivalent to this global conversation is the `word of mouth’ benefits that brands earlier enjoyed in the brick-and-mortar era.

Join the conversation

The solution that one foresees in such a scenario is for brands to turn interactive, and actually join the conversation. Interactive brands would be those that effectively conduct two-way conversations with their defined marketplace. The earlier era was one of uni-directional communication, which involved running advertisements and other branding initiatives on one-way communication media such as the television, radio and billboards. Potential customers were expected to passively absorb messages from such media, and consume the advertised product or service. Occasionally positive word-of-mouth contributed to brand choice in addition to the creative message. However, with the emergence of the Internet, word of mouth assumes a much more significant and globe-spanning role in brand choice.

Corporate blogs

How then do brands engage in two-way interactions with their defined marketplace? One effective way to do this is a corporate blog, which incidentally finds itself in Bain Company’s list of top 25 management tools of 2007. A key benefit of a corporate blog is that it enables an organisation to communicate in an honest, human voice to the world at large.

This honest voice would involve such former taboos as publicly acknowledging mistakes as and when they occur, honest promises on customer service levels, transparent communication on future product launches and internal thought processes. In addition to this, customers can use this forum to openly talk to the company, and about their experiences with the company’s offering. A static corporate Web site can never create the kind of interactivity and richness that a corporate blog can offer.

Community of users

Another way for brands to get involved in the conversation is to create communities of users. Two examples come to mind – The Royal Enfield owners club of the UK, and closer to home, Sunsilk’s `Gang of Girls’ Web site. Such communities allow customers to interact with other users of a product or service, and have conversations that have the incidental benefit of providing inputs to product development initiatives. Additionally, they would also help companies observe the evolution of their customers, and respond much faster than ever before.

It appears that brands will have no choice but to be part of the conversation between users, or risk being left out completely. This is not to say that traditional brand building approaches are no longer valid. They still have a role to play, but that role is more likely to help in reinforcing the brand’s message, rather than creating it from scratch. Additionally, smart brands will no longer view people as `target groups’ but start viewing them as people whom they can best understand through conversations.

Iconic brands tend to tap into a customer’s self-actualisation needs on Maslow’s hierarchy of needs. People get emotionally involved with brands when they can relate to the brand in a manner that goes beyond mere price or quality. It is equally important for brands to get emotionally involved with their users by joining the conversation, or risk commoditisation. The choice is clear!

(The writer, an alumnus of XLRI, is with a multinational financial services firm.)

Some of my previously published articles.


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The spiritual organization

A recent article of mine which appeared inThe Hindu Business Line.

Link to the article: The spiritual organization

Full text follows:

People who work in a `nine-to-five’ kind of workplace must often wonder why `work’ is structured the way it is. The modern nature of work has its underpinnings in the Industrial Revolution and its many factories. These factories presented an interesting challenge in how a large number of workers were to be efficiently managed to produce a desired level of output. Frederick Taylor successfully studied and analysed work in factories, with his simple motto being reduction in variability — in other words, viewing people as mere parts of a machine that had to work together to produce a desired product. Needless to say, this view of work and human resources could not last for long.

People do not necessarily work to satisfy an economic function. People work for various other reasons including fulfilment of their potential, following their passions and so on. Such motivations are much truer of the modern knowledge worker who works more in the realm of ideas and analysis as opposed to actions and objects. Yet, I find that most organisations still largely view job roles along the lines of the `parts of a machine’ model described earlier. With most modern professionals spending a significant chunk of their waking hours at work, work ends up being an important sphere to achieve a lot of life goals apart from economic goals. Work may even become a path to spiritual development (suddenly shifting the focus from the here and now to the next world if there is one!). The Industrial Revolution (and the Protestant Reformation) on the other hand, made society focus more on this world, with work being an important component in it. The Industrial Revolution and the modern knowledge economy are at opposite ends of the spectrum in the nature of work they create. And yet, very little has changed in the approach that modern organisations have towards people.

Most organisations that claim to be modern in all respects — be it technology, strategy, CRM, operations and so on — manage to be extremely archaic in their people practices. I find a huge hangover from the industrial era still permeating the hallowed corporate hallways. It appears that the `modern’ knowledge worker lives in a world populated by access cards, nine to five regimes, appraisals that tend to measure performance in the way a car’s performance would be measured and so on. It is thus no surprise that the very term human resources seems to convey a view of people as input-output machines (pay salary, will work).

In my view, the organisation of the future must be a spiritual one. Its goals must be closely aligned with the life goals of its stakeholders. In such an organisation, I would give people the freedom to choose what they want to do, within broad constraints. The underlying theme would be that people inherently love to work when the kind of work they do is closely linked to who they truly are. This concept finds support in the Bhagawad Gita too, where Lord Krishna commands Arjuna not to be a coward, and to be true to his dharma (the true nature of one’s personality). The current approach to hiring, on the other hand, seems to be one of `filling open positions’.

Second, the spiritual organisation would pay closer attention to the non-work goals of employees. This may mean allowing employees to spend significant chunks of time pursuing these goals even during the `working day’. Career growth paths would be super-customised and not standardised. Thus, on a broad level, a spiritual organisation would place self-actualisation before profits, and this paradigm would present itself in the organisation structure, hierarchies, roles, career paths, approach towards customers, products and so on.

It is not as if organisations have been entirely oblivious to the way people view work today. A lot of new age companies — technology companies like Google, start-ups and others — do experiment with people practices to foster a culture of flexibility and openness. Hierarchies too are becoming a lot more informal. However, if one looks at the entire spectrum of organisations and not just a few nimble new-age companies, there is still a long way to go. People have progressed from being mere `resources’ to `human capital’, which is the most important non-substitutable resource in this knowledge economy. It’s about time this change is acknowledged and capitalism turns into human capitalism!

(The writer, an alumnus of XLRI, is working with a multinational financial services company )

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