I recently had the opportunity to travel to Mumbai and participate in a panel discussion about higher-ambition leadership with the four Indian leaders we interviewed for Higher Ambition: Anu Aga, Anand Mahindra, Narayana Murthy, and Ratan Tata. Also joining us on the panel, which was hosted by the Harvard Business School Club of India, was another higher-ambition leader, Ravi Venkatesan. Ravi is the former chairman of Microsoft India and Cummins India Limited, and he currently serves on the boards of Infosys and AB Volvo.
Ravi compared today’s challenge of delivering social and economic value with the debate from 20 years ago over whether it was possible to achieve both high quality and low cost at the same time, which is a point we discuss in the book. People used to think that you could have just one or the other — high quality or low cost — but then Toyota came along and showed that you could have both. In the same way, Ravi noted, there’s no dichotomy between doing well and doing good: “We now understand that just as high quality leads to low cost, high social value increases economic value.”
As we wrote in our book, “higher-ambition leadership raises aspirations and defines new possibilities, beyond any benchmark. Just as eliminating waste enables greater quality, faster cycle time, and lower cost, so higher-ambition leadership enables superior performance on both economic and social dimensions through greater energy and reduced organizational ‘friction.’”
Ravi also observed that building a great company requires confronting reality in the boardroom. “The most important thing at the board level,” he said, “is to confront the truth, whatever that truth may be.” Once you do that, people can be effective at figuring out what to do. But “job #1 in the boardroom,” he emphasized, “is brutal honesty in confronting the facts.”
What higher-ambition leaders do, Ravi noted, is to put their leadership teams through diverse experiences so they can “see themselves as world sees them. It’s all about confronting and recognizing reality — and understanding the ways in which we need to change or transform ourselves before it’s too late or before it becomes too painful. The finest leaders are those who absolutely force their leadership teams — with no escape hatch — to see the truth.”
One example of “seeing the truth” comes from Standard Chartered Bank back in 2001, when Mervyn Davies and Peter Sands got investors and analysts to talk directly to the top 300 to 400 bank managers so they could tell them (in Sands’ words) “how seriously pissed off” they were about the bank’s languishing share price and inefficient capital structure. That was a wake-up call for managers, helping to create a sense of urgency about the need to improve performance. You can read about the SCB turnaround story in Chapter 2 of the book.
Here’s a link to the Wall Street Journal’s coverage of the HBS event.
Flemming (on behalf of the Higher Ambition author team)