Reflections From Thought Leaders

Updated: Nov 15 2003, 05:30am hrs
He wears many hats, advises corporate and social leaders across the globe and is respected as one of the most influential management thinkers of our times. Yet social philosopher, best-selling author, radio commentator and big guru Charles Handy is nervous. Reason: he has been thinking about the presentation that he will be making at Ad Asia 2003 the next day. Surprising then that as he and his wife Elizabeth, flits in and out of the various sessions listening to different speakers, very few people actually realise the person in their amidst.

But thats typical of Charles Handy. He carries his big name lightly. Unassuming and soft-spoken, he travels a lot with his wife Elizabeth. Thats how he picks up a lot of his ideas and thinks through what lies ahead for corporations and society.

One of the first to predict the massive downsizing in organisations and the emergence of independent professionals, Handy has the ability to look into the future at society and the way in which organisations are changing.

He has also predicted that China could in the coming decades disintegrate because of the social and regional disparities that could emerge. He constantly advocates the need to reinvent organisations if they are to survive the turbulent tests of the global economy.

Handys main concern today is the implication for society and for individuals, of the dramatic changes, which technology, demography and economics are bringing to the workplace and the lives of the people in various countries. His books on these themes which he started writing in 1975, has sold over a million copies around the world in many languages. The Irish-born, London-based management thinker last book was Elephants and Fleas: Is Your Organisation Ready For Change In this he argues about the constant need to reinvent organisations.

Says Mr Handy, My argument is that we should always be thinking of the need to reinvent ourselves. That does not mean that we do it all the time, but that we need to think about it all the time. If you late, then rather than an evolution, then you have to have some sort of revolution. And then it is very unlikely that an existing CEO can lead a revolution, because there is always somebody else who leads a revolution.

That is why Handy argues that it is critical that chief executives should constantly be looking at changes within the corporation. Otherwise they themselves could be swept off. Thats a powerful warning for CEOs in India and abroad.

It is in this context that Handy talks about some of the corporate governance issues. He is critical of the huge compensation and stock options that CEOs take home.

Adds Mr Handy, I think we have to think about organisations and how they measure success. To get bigger every years seems impossible. So how do we grow. You dont need to grow richer. You can go deeper and better.

In many ways, he says that all these issues are deeper than just corporate governance.

He is also critical like many others who do not have best practices in board management and appropriate structures. You do need an appropriate mix of people who understand how the company runs. But I dont think they should be just friends of the chairman.

But one of his sharpest criticisms is about the share options model that is prevalent in across global corporations. Says Mr Handy painfully, It is dreadful. Because it is a cheat. It is off balance sheet. The share options do not appear anywhere. Why should the chief executives be rewarded when the economy of the country is going up.

The world is changing so rapidly. Most people will change their career three times. They will become more of a flea or an independent person. Most people will want to start in an organisation because that is where they will learn the systems and processes
He says that part of the turmoil in the United States is because of share options system. According to him, in 1980, only two per cent of chief executives had share options. Today, it is 60 per cent.

He bets on India and but predicts that business family groups may not survive after three generations. He also advises Indian business leaders to constantly reinvent themselves if they are to remain relevant for themselves and their corporations.

Mr Handy also does not have a pleasant message for Indian business groups, particularly those conglomerates that diversified and grown big. He warns that it is going to be very difficult. And that if they get too big, they will have to go public to the public for more money. And he emphasises that once a company goes public, it is no longer the master of its own destiny. Predicts Mr Handy,All family businesses tend to survive only three generations. They get too big. The family always does not produce the right talent.

Mr Handy and his wife in their book New Alchemists argued about the need to redesign peoples lives in organisations. Further he also believes that a federal structure in corporations with a small corporate centre is important. He argues that corporations need to redesign organisations around the goals that it wishes to achieve.

But then why is ABB worldwide which was one of the global corporations which followed this model in trouble today. He attributes some of the problem to the post-Percy Barnevik period. Says Handy, Barnevik was a very strong leader. He was was what I call a teacher. He would go out. But I think when he left, he was replaced by managers. That is one trouble in a federal structure. If you need to hold it together, then you need somebody with a compelling view of the organisation to spread that message by constant communication.

Mr Handy is also not very comfortable with organisations that just want to grow bigger and bigger in sales and numbers. It seems to be that it is a logical impossibility. I remember one day standing in the corporate head office of IBM about 35 years back. There was a chart on the wall and one line which showed that GDP of US. The other was the revenue of IBM. It was then that he noticed that the revenue of IBM was more than the GDP prediction. And I said, this is a joke. I asked: Are you saying that the revenue of IBM will be greater than GDP of US. I said, aha. No revenue of a company can be that big without being a political organisation and one of the problems of ABB is that it got too big. And to hold it together at the centre required somebody of enormous stature.

Given this background and having worked with so many business leaders across the globe, what are his perceptions on leaders and what are the common traits that makes the best leaders

Truth is one of them. Because people who are true to themselves and are genuine and who live that truth. I think you can only trust people whom you know are true and genuine. Second, I do think that you have to have a bit of a dream. People are giving them their lives. There are some good leaders who are there not just to make shareholders rich. They want to be believe about their contribution to the world. Then I think toughness is an important trait. You have got to take tough decisions. You have got to be truthful about people. You have to say to people, you are not the right person for this job. I thought you were. Maybe, you were. But maybe you have got a better future somewhere else. That is being tough. Very tough. I will be a very bad leader because I am not very tough. When I was in organisations. I was weak. I also see a lot of tough leaders. But I dont think they are truthful sometimes. That is not enough. You need to have all three. You dont meet many who have all three, just some.

In may ways, Mr Handy has reinvented his life after you left Shell where he worked during the early pat of his career. How does he look back at his career now What are the lessons learnt for managers wanting to plan their careers

I think everybody understand that the world is changing so much that rapidly. Most people will change their career three times. they will become more of a flea or an independent person. Most people will want to start in an organisation because that is where they will learn the systems and processes.

His life partner for 42 years, Elizabeth, a portrait photographer, is also his business partner. They have also co-authored books including Reinvented Lives: Women at 60. They have what Handy says a portfolio life balancing their skills and their time to make the most of their independent and in some ways, collaborative careers.

But take a closer look and in many ways they are as different as chalk and cheese. Handy is genteel. Elizabeth is more outspoken. They have been to India many times travelling from New Delhi to Kerala, building friends and relationships. Elizabeth Handy reveals that Charles is working on his next book: Designing Your Life.

Even as he advises large number of CEOs on how to make change happen, he has the humility to confess and realise that he would not have been a good leader. He redesigned his life and career and today has reached the position where he is. Are you ready to do that