Humble CEOs are recalled fondly: History values performance with humility

What mental health is for young people, arrogance and ego are to boardrooms. Is the opposite, the quiet, low-profile performer, even possible?

Mahmud of Ghazni is remembered for depravities and wars. Apparently, he had a Hindu army division, which he used to fight rebel Muslims, as during the capture of the Zarang fort in 1003 CE. Mahmud’s capital city and tomb are now crumbling, unmarked and uncelebrated. Such is the collapse of arrogant power and pomp!

 

What mental health is for modern young people, arrogance and ego are to boardrooms. The evidence that CXOs are increasingly affected by arrogance is anecdotal, but a sure trend. In my 2018 book, CRASH, I quoted researchers, who found that power intoxicates a leader and impairs the person’s judgement (Professors Pamela Smith, Dacher Keltner, Sukhvinder Obhi et al). The pressure on chief executive officers (CEOs) to constantly demonstrate energy and competence is excruciatingly intense.

 

Paradoxically, the performance metrics are subtle and ambiguous — if you can, listen to Donald Trump’s views of Joe Biden’s performance!! CEOs are evaluated as if business delivery can be precisely measured. If a CEO cannot deliver growth, increase market share, or report higher profits within a time frame, the person is fired or he or she quietly resigns, like in Starbucks, Paramount Global, and Boeing. Even in conservative Japan, the Suntory CEO, Takeshi Niinami, lamented that Japan has reached a “tipping point”, driven by shareholder activism. Can India be far behind?

 

Outsiders do not have authentic information about the company. Reasons behind CEO partings are many, including being authoritarian, arrogant, or behaving as if they are god’s messenger. Investors, CEOs, civil society, and corporate boards find that trust is thinning rapidly, just as political leaders experience with their voters.

 

Conscientious leaders earn long-term trust by doing the right things in the right way at the right time. After the death of Mahatma Gandhi, Lal Bahadur Shastri, and Manmohan Singh, it is their humane qualities — insaniyat, ibadat, and inayat (fairness, courtesy, and grace) — that are remembered. Wipro’s values, for example, include “treating people with respect”, and “unyielding integrity”. Leaders are prone to narcissism, and social media aggravates matters. The few who cross the line make big news.

 

People work through a mental image about leaders’ performance. Numbers help but are prone to cherry-picking. Consider the data on Manmohan Singh’s economic record. From 2004-2013, India’s economic performance was among the country’s best in eight decades (based on the 2011-12 constant price series). Annual growth in gross domestic product was 6.7 per cent, gross capital formation growth was 9.6 per cent, private consumption expenditure growth was 6.2 per cent, per capita income growth was 5.04 per cent, and export growth was 12.1 per cent. Singh, quietly and without fuss, delivered his amrit kaal with no announcements. Yet there were some blemishes. Disappointingly, balderdash has developed that he did not perform. Some incoherent voices also proclaim that India “gained independence” after 2014!

 

History values CEOs for performance but dearly treasures humble performance. Integrity is ascribed when words match deeds. Narcissism is the gap between leaders’ words and deeds. Narcissistic leaders generate news during their tenure and are later remembered for performance, but also their self-obsession, charisma, demand for personal loyalty, and mental derangement. When narcissistic leaders have humble backgrounds, acolytes embellish that fact; for example, Nadir Shah, Napoleon, and Hitler, who match all the above characteristics.

 

Stanford researcher Charles O’Reilly says that narcissistic leaders believe that they are superior, rules are meant to be bent, and they lack empathy, bluff without shame, and never admit their mistakes. Think of Bernie Ebbers of WorldCom or Ken Lay of Enron. Is the opposite, the quiet, low-profile performer, even possible?

 

I quote published news about the CEO of DMart Avenue Supermarts. After 22 years as CEO at DMart, he is reported to have stepped down. His team built DMart into a retailer with 380 stores, a revenue of Rs 50,000 crore, and a market capitalisation of Rs 2.20 trillion. Who knows, maybe after 22 years, it is a good time for the CEO to change.

 

The CEO is Ignatius Navil Noronha, and the promoter is Radhakishan Damani. Ever heard of them? Perhaps they are grateful to be left alone to get on with delivering their targets. Read Navil Noronha’s statement upon moving on: “I believe that DMart is a business model that has a multi-decadal runway for growth. If we stay the course of simplicity, efficient costs, happy employees, deep value to customers, and, most importantly, not doing anything else, we will always remain relevant for a long time to come.”

 

Time will tell if he is right. DMart is a great company, but must evolve as a long-lasting “institution”. As of now, he seems a rare, humble, self-effacing, and performing CEO, who leads from the back (refer to Ravi Kant’s book Leading from the Back). 

The writer’s latest book is JAMSETJI TATA: Powerful Learnings for Corporate Success, coauthored with Harish Bhat

 

rgopal@themindworks.me