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3 Leadership Lessons From Tata's Boardroom Coup Against Cyrus Mistry

04/11/2016 6:29 PM IST | Updated 09/11/2016 9:16 AM IST
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Vivek Prakash / Reuters

Anyone who reads/watches the news is aware of how Cyrus Mistry was made to resign by the board as chairman of Tata Sons. The dramatic ouster created headlines—the Tata group is one of the most respected companies of India and this sudden change has surprised many. No one had expected the tenure of Cyrus Mistry to be so short-lived and there's been no official communication from the Tatas on the reasons for the firing although speculations are taking up plenty of newspaper inches. However, the objective of this piece is not to look for reasons but share a few leadership lessons that any executive needs to keep in mind while navigating corporate terrain.

Leadership is a political process

As one has understood from media reports, one of the reasons why Cyrus Mistry had to go was because he was not able to galvanize the support board, Tata Trust and other key stakeholders on what he was trying to do. For example it was reported that Cyrus Mistry had not kept the board informed about certain acquisitions.

Political astuteness matters. Those who tell you to "be authentic" and "just do what your heart says" are ill-informed.

A CEO's job is just not about vision, strategy and execution. It is also about being able to carry all relevant stakeholders along. Business executives often don't realize leadership is a political process. I often come across business leaders who tell me that they hate politics. They do this because they have poor understanding of what politics really means—for them being political is a taboo and something which can defile an organization. Here's the thing: being politically savvy does not mean backstabbing someone or using treacherous means to get to an end. Political astuteness is about being aware of all of all your stakeholders and having a sense of "who is with you" and "who is not with you" as you embark on your effort to achieve your organizational objectives. This is not easy stuff and requires deep observation, solid networks and an understanding of what people are saying and not saying.

As a leader climbs up the organizational ladder, sending and responding to signals becomes very critical. This is not a onetime exercise but something that a leader should do for every new initiative. A leader should know not just how to manage those in their team but also those above them. Leaders should make the effort to identify those who do not support them and then try to get them on board. Leaders should know how to influence and persuade to move their agenda forward.

If you do not like networking and are not good at understanding and relating to people then success in the workplace will be a mirage for you. Remember, political competence is a sine qua non for organizational growth and success. Those who tell you to "be authentic" and "just do what your heart says" are ill-informed. Organizations are social engines where success depends on how effectively you are able to influence and manage those who matter.

Know when it's time to bid farewell

A senior lawyer who advised the Tatas confirmed that both Ratan Tata and Harvard Business School dean and Tata board member Nitin Nohria tried to persuade Mistry to quit, but he did not heed to the request. The point here is that when two leaders of this stature tell you to quit, you should not think twice. However painful it may be it's better to call it a day. And once you are shown the door, you should exit gracefully.

An individual's future tenure does not depend on past successes but on how relevant they will be in the future.

In this case, Cyrus Mistry tried to wash dirty linen in public and even mentioned that he was a lame duck chairman. The question that comes in one's mind is that if this was true and he felt like a lame-duck chairman, why did he not raise the matter during the four years in which he led the company? To mention it now makes him look like a weak leader and someone who lacked the courage to confront difficult issues upfront.

A key element of leadership is having the courage to take on the thorniest issues head on and resolve them. Once you are asked to go, don't show your emotions publicly. It just makes you look like a bad loser. Remember, for an accomplished leader like Mr. Mistry, life does not come to an end with this change. He should just accept it and focus on his other ventures and take them to success. Remember, people have short memories and this too will be forgotten.

Never be complacent

However successful you have been in the past, you can never rest on your laurels. Every day is a new day and a corporate executive has to constantly work towards their relevance for tomorrow. I am not saying that Cyrus Mistry was complacent but if a chairman whose family has more than 18% stake is asked to go, anything is possible. Remember, in 1985 Steve Jobs got fired by the company he had founded because of his uneasy relationship with John Sculley. Or how Vikram Pandit had to make a sudden exit from Citigroup in 2012, despite steering the bank through a difficult phase and paid back $45 billion of federal lifeline. Or the way CO-CEO of Deutsche Bank Anshu Jain had to leave despite being a star performer as an investment banker.

Point is that a company can be ruthless regardless of how well a leader has performed in the past. Like it or not, organizations are transactional in nature. An individual's future tenure does not depend on past successes but on how relevant they will be in the future.

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