Day 49, Tuesday Oct 26th, 2010

Today is the final day for case based discussions ! Yes, finally we are at the end of the program. The next three days are for for summary final lectures by the professors and discussion on how to re-enter back to work and home.

Today we had three cases. The first one - and the final one related to organization changes and leadership was the extraordinary story of Carlos Ghosn - who architects the revival of Nissan Motor Company in 1999. An outsider, non-Japanese speaking coming to change a traditional company in Japan, should be a daunting task to any leader. What is the process Carlos used :

• Involved people at all levels
• People identified to lead task forces were selected based on two parameters
• Good front line experience
• Strong personal credibility
• Sent a strong message that he trusts people, by using all internal teams
• Internal teams know the problems and hence they are the right guys to suggest solutions as well
• Tapped on people's motivation to revive Nissan
• If there was a significant deviation from the plan, he was ready to do course correction

Leaders are architects, coaches and be in the trenches at times. They have to play various roles at different times. Sometimes for driving major change, you need an insider-outsider - an insider to the company, but an outside to the group or division. Sometimes you need an outsider, period. In this case it was the later.

The second case was of an ice cream company started by two maverick founders, who  grew the business to $150m company in 15 years.  But realized that they needed professional managers to run the company as it had become big and competition was from the Goliaths like Neslte and Unilever. Though they did get a CEO, there was too much of interference from the founders.  Using this case, we discussed why do strategies need renewal, what is the best time to do it, where should you go from here, and how can you get there.

As discussed in the Whirlpool case, strategies decline and require renewal due to external threats and internal barriers. In this case:

• External threats : intense rivalry, slower growth, higher fixed costs
• Internal barriers:
• Failures of perception, motivation, inspiration and coordination

When is the right time - waiting for financials to indicate a problem is dangerous. Where should you go - better to choose a bundle of choices, and not an incremental change; and towards  uniqueness and advantage, not just a "me-to". How do you get there : Stabilize the business, stop the bleeding, pick the low hanging fruits and aim for operational efficiencies.  And then look to fundamentally change the positioning.

Common pitfalls are: stopping after the initial success and not taking up the fundamental changes needed, failing to address the internal barriers adequately and undertaking small changes, when major makeover is needed.

Just to clarify the internal barriers:

• Perception : "I don't see the threat"; typically because of denial, high pride in past successes, and misplaced sensors
• Motivation : " I see the threat, but don't want to respond";
• Inspiration: " I want to respond, but don't see how". Sort of deer-in-the-headlight syndrome; needs strong leadership and a detailed plan
• Coordination: "I see how to respond, but can't get the organization to move"; mostly political issues within, risk aversion, may need some changes in leadership

The final session on Leadership and Corporate Accountability was on the case of whether Sustainable and Socially responsible investing. In this case, the question was whether to invest in a project which is not environmentally friendly (coal based electricity generation machines), but it will alleviate poverty to millions of people. Complex issues, with no clear answers.

Companies are members of the community from which it receives benefits and privileges. But it also comes with some responsibilities, especially when it affects the community and the economy. Faced with these complex ethical issues, corporations find it difficult to decide , and the ground is shifting as the expectations from corporations have changed. The law is not clear in many cases and is different in various countries. Governments alone cannot respond and economics of acting come into conflict with impact to reputation of the company. So what to leaders do ?

• Good news - there are no easy answers or magical algorithms
• What ever you choose to do, it is likely to be a better decision, if
• You should be there in person, understand first hand the problem
• Be proactive than reactive, by actively engaging in policy
• Look for opportunities to act - even small acts matter
• Be practical
• Don't ignore the problem
• By abstaining and rationalizing that it is not your problem
• Or try to solve the world-hunger problem
• Ask the systemic ethical questions

Disappointed that there is no easy solution ? Let the truth be told, there are no easy answers.

End of class there was a sense of relief that there are no more cases to read. And today we had to pack all our reading material to be sent home. Andrew Kwong, who is a participant in AMP, is from DHL; and he was gracious enough to get some discounts for us to ship these stuff. And the DHL teams came in and picked out boxed - most of us had two carton boxes full of case studies, books and notes.

Weather was fabulous today - in the high 60's Fahrenheit. Some guys played one more round of football, we played tennis for about 90 minutes.

I will write one summary blog based on the final lectures. I also promised to write on a good framework for Ethics, Human Rights and Business and Balanced Scorecard - which I will do over the next few days. Till then ...