What really went wrong?
Continuing from our previous post (Part 3) we try to piece together the specific issues that could have contributed to the trust deficit at Tata Sons Boardroom, leading to Mistry’s ouster.
Leadership Definition –
In case of Tata Sons Board, it appears there was a sharp disconnect in understanding what defines Leadership. Leadership is about making a difference through identified philosophy and purpose. In the absence of these, markers, business remains meaningless at best and useless at worst. In a storied institution that too at the holding company level, the term leadership essentially stands for Trusteeship and Custodian of legacy, reputation and brand. It is about nurturing and nourishing something substantial that has created a USD 100 Billion conglomerate over 150 years. So the way to make a difference is to deepen and broaden this legacy through institutional markers that have withstood the demands of time.
This is about pursuing Identity led Leadership (Institutional) instead of Personality Led Leadership (Individual). Identity led Leadership is about giving strategic leadership direction based on the philosophy and purpose of the institution. This is about acknowledging the supremacy of the institution’s identity that acts as the marker for leaders to chart their course and define the broader direction for the Group’s business. Essentially the timeless principles of governance and leadership.
Mistry perhaps made an error of judgment in pursuing a Personality led Leadership style. If an assumption gets made that to establish one’s mark on the institution legacy, one needs to look for alternative approaches that perhaps appear to challenge established principles, then the leader is not enhancing proven legacy but looking to establish a personal imprint on the institution. Further in pursuing a personality led leadership instead of identity led leadership, Mistry may have alienated both the Board as well as influential business heads.
Leadership Orientation –
Alignment of Orientation (approach) is perhaps more critical than alignment of objectives. Leadership orientation is about defining the method of operation that finds resonance with the broader mindset and the cognitive construct of the Group. Orientation becomes even more decisive in situations that need to manage complex business issues across an empire that enjoys rich legacy and with an active global footprint. Orientation is what defines stewardship in an institution by giving collective expression to its pursuits.
While there might have been an alignment of broader objectives and goals, what is more crucial is alignment of orientation in pursuits of these objectives. Alignment needs to be established both for objectives as well as orientation else it leads to management conflicts. In fairness to Mistry, this orientation expectation should have been translated with full clarity while defining the broader business objectives. It could have saved the Group plenty of blushes.
Origin (where we begin – legacy issues), Orientation (accepted Group philosophy) and Objectives (outcomes that are collectively agreed upon) are the three essential attributes that determine whether the leadership is being positioned for success. Absence of any of these attributes could result in misaligned priorities and outcomes, resulting in expectations mismatch.
Misfired Intentions –
Mistry had already spent around 6 years as Director on the Board before accepting the role of Chairman of the Group. This is a sufficiently long period at highest levels to understand each other and working style. Having been party to business decisions by virtue of being a Director on Board of Tata Sons, Mistry should have been aware of the depth of problems that were facing the Group.
Instead Mistry took a hard nosed view of business as a portfolio operation, thereby missing out on the larger picture of building a network effect by driving deeper linkages amongst Group firms for greater synergy and improved performance. Managing business is not the same as portfolio rationalisation. Managing business needs deep understanding, application, skill, patience and conviction in turning around a business situation and setting it back on course to growth and profitability.
Given a mixed bag of business slate, it was vital for Mistry to have taken a long term, collective approach to decision making instead of charting out an independent path. Clearly this has been a case of flawed leadership orientation where greater emphasis was put on fixing business numbers rather than on improving quality and sustainability of business.