What would a leadership development program for Travis Kalanick or Martin Shkreli look like? What could it entail?
It was only sometime ago that [the former] Uber CEO Travis Kalanick was in the news for the video recording of a conversation between him and a Uber driver, who was protesting against the company's policies which he claimed, had made him bankrupt. Earlier, Kalanick had to address over 100 female Uber employees in response to allegations of improper conduct towards a female employee, and admit that some of them “had experienced things that are incredibly unjust”. Such incidents eventually led to Kalanick stepping down from the CEO's seat earlier this month. While explaining his conduct towards the driver, Kalanick was forced to admit that he needed to take “training in leadership”.
During a discussion with a few participants of the Owners Management Program, (an executive management program developed solely for business founders and owners, that I head at SPJIMR), I was asked, if I were to design a leadership program for such super successful business founders, what would the program look like. While I would like to claim that our OMP program (or possibly any other similar program from any reputed B-School) covers most of essential components, I took the challenge up, with the greatest of humility to answer the question.
I would like to make a disclaimer that I-an associate professor of family business and strategy-may not be the best person to do this, lest I be attributed with the same hubris, that some of our greatest leaders are now being credited with!
Some of the key components of the program for leaders would be:
Leadership: Specifically, subjects' leadership: To understand that a leader has to take the others along with him, instead of putting himself in an ivory tower and distancing himself from his subjects, lessons in empathy and the need to contribute (give back) to society are essential. It may not have a direct impact on the bottomline, but they are definitely necessary.
Required readings: The stories of Gandhi, Martin Luther King or Nelson Mandela, for their humility and resilience of doing what is right. Gandhi, for his ability to rally everyone against the British around a common cause, at the cost of personal benefits. The story of someone in power and yet being humble. Additionally, to understand how the Akbar, the Mughal ruler went incognito amongst his subjects at night, to get a pulse of his people's needs. Robert Cialdini’s book, Influence, is a must read for understanding how to influence people without actually using power. The classic How to win friends and influence people could be an additional optional reading. True North by Bill George is invaluable to get thinking about the moral compass and to orient action toward their desired goals. The rise and fall of the Roman Empire, to caution leaders of the perils and guarding against arrogance and hubris due to their huge success.
Ethics: A case study on Martin Shkreli of Turing who increased the price of Daraprim, an AIDS and cancer drug from $13.50 to $750 overnight, nearly a 5,500% jump because he needed “to make a profit”. The video of his appearance before the Senate committee should be a required viewing. The key discussion point would be, “Is he right?”. A leader’s responsibilities and decisions could be studied from the legal, fiduciary and ethical viewpoints.
Maybe even examine Mr Kalanick's statement, “Some people don’t like to take responsibility for their own shit. They blame everything in life on somebody else”. The need for leaders to be observant of the larger scale implications of their statements, decisions, and the balance, if any, between the pursuit of profit and the greater societal good, would be a required discussion.
I was reading about the Kalanick incident while going to work in an Uber. My driver, when asked, mentioned that his earnings had come down by over 50% because Uber had stopped giving incentives. This had left many stranded, as they had taken expensive loans to become drivers for the app-based service provider. They were now staring at a dismal future. He admitted that the early bird drivers had made a lot of money driving for Uber, but now, with the incentives gone, the entire business model had become unprofitable for them. So they resorted to protesting against Uber's policy. In retort, Uber asked them to stop working if they were not satisfied, which wasn't an option for them. This was a modern debt trap, where the drivers were forced to work just to keep up repaying their interest installments. The Uber drivers in Mumbai had protested and even went on a strike, but at the time of writing this article, things were still unclear for them. Whether the drivers should have been wary of a good thing not lasting forever or is this a rationalising decision for Uber to become profitable, is a different discussion.
There have been other cases in India, for example, at a Japanese-run auto manufacturing plant, the labour agitated after they were asked to follow strict rules to increase productivity which they resented. A protest by the workers turned violent. So there are lessons to be learnt here, in finding a balance between social good and the pursuit for profits by privately-held corporations.
People: A bigger discussion would be on the impact of people in organisations. As quoted in the press earlier, Leadership BS by Jeffrey Pfeffer and Adam Grants' Give and Take, would be required reading to understand the changing management demands, especially in these times of greater uncertainty and tougher economic conditions.
Self: An analysis of your personality, strengths and weaknesses to find blind spots. Additionally, the dynamism of a leader to switch between leadership styles according to what the situation demands-from being a task master to a complete people's person-is essential. An understanding of how much is enough, and setting goals for yourself would be an essential component.
Up next, I would discuss the expectation of the financial markets, which reward super efficiency and higher profits or growth. One cannot deny the $70 billion valuation that Uber has today, undisputedly due to Kalanick’s achievement of making the company a household name worldwide. Similarly, if the target company’s shares rise, when 3G announces its next takeover company, it is because the markets see an opportunity for making profits there. The fact that during these spurts of 'efficiencies' there are people being rendered jobless is something that may be overlooked in the euphoria of enhanced earnings. So maybe, to give the benefit of the doubt, these are behaviours in response to the greater stakeholder expectations. However, leaders need to understand how to respond to and withstand such pressure. The growing preference of companies looking to delist, is a trend which may reflect this. A case study of Enron and Satyam Computers would essential.
An additional reading would be the article Strategy in the age of Superabundant Capital by Michael Mankins, Karen Harris and David Harding, in the latest issue of the Harvard Business Review, to understand that in today’s times, capital may not necessarily be a competitive advantage. Any guesses on what has been identified as a key advantage?
I would also include a session on disruptive technologies to build awareness that no company is unassailable today, especially in the tech sector (if we assume that Uber falls under this sector). It's important to understand that success, especially in the tech industry, is temporary, and that being relevant over the years is a big challenge that requires a lot of work. The biggest incumbents can be threatened by a young team working out of a garage. The need is for leaders to be humble enough to recognise this and work towards protecting their companies. Clayton Christensen’s latest book, Competing against Luck, and the Innovator's Dilemma would help understand this. Specifically, the need to think away from products and services to understanding the jobs to be done, which could threaten an organisation.
I would definitely include sessions on growth, specifically asking questions like, “Do I need it?" and "How do I grow?”. Let’s understand that leaders are under tremendous pressure for growth. And the bigger the company, the more difficult it is to achieve growth. A 10% growth maybe easy for a mid-sized company, but quite a challenge for say, a Walmart (ranked #1 on Fortune 500 list, 2016 revenues about $482 biillion) which would need to generate additional sales almost equal to the 500th ranked company (Burlington Stores, 2016 revenues $5.1Billion). Every year. This is keeping any other probable changes that may affect business during the year aside.
I would probably ask them to read books by Edward Hess of Darden tii, to help them figure out their motivations for growth. Each leader makes trade-offs, and their choices determine their organisation’s fate. The discussion would be: How to know what choices to make? And what are the right choices?
I would also venture forth on suggestions on family businesses, since I believe that these are questions most leaders and founder entrepreneurs should be asking themselves:
Values: To understand what values drive a company and how to imbibe these into the company. This would also help to get a buy-in from all the employees of the firm, since this would enable everyone to understand what is acceptable conduct and what isn’t. It would help develop an environment where the system would ensure that employees who are not clearly aligned, prefer to leave. Because, at the end of the day, it is the founder’s responsibility to create an organisation where the employees feel motivated and safe. And it is his fault alone, if the company fails to reflect this. Then what becomes moot is, how to ensure that the leader recognises his shortcomings, and is not blind to such transgressions, to step aside or create systems to tackle these so that the organisation does not suffer.
Legacy: I would ask leaders to introspect on what their legacy is, and what they would like to pass on to the next generation. After all, the next generation emulates their parents’ behaviour, more than what the parent is actually saying. This would raise the question, what would we want our kids to grow up to be? Like us? The issue of what the leaders want to do to balance their life, would be an interesting aspect to consider.
These are some issues, which I believe, would help leaders evaluate their current position and their responsibilities. The list is by no means, exhaustive or complete, but just an attempt in this direction. The final outcome would definitely depend on the participants' thirst for knowledge and willingness to learn, which in some well-documented cases, is at times a little too late. For the other vast majority, there is always hope for improvement.
Rajiv Agarwal is an associate professor of Family Business and Strategy at SP Jain Institute of Management and Research Mumbai (SPJIMR). He heads the Owners Management Programme and Womens’ Management Programme at SPJIMR. He is also a consultant and works with numerous business families advising on leadership, strategy and various family issues.