The Leadership Thing

Roopen Roy The Book of Exodus is the second book of the Jewish Torah and the Christian Bible. It describes how Moses leads the Hebrews from slavery in Egypt to freedom in the promised land. The most dramatic scene, immortalized by Charlton Heston as Moses in the motion picture The Ten Commandments, is the crossing of the Red Sea. When the Hebrews are pursued by the marauding Egyptian army, they are filled with fear. Moses holds his staff over the water and the Red Sea is parted. Moses and his followers have safe passage with a wall of water on either side. The Egyptians pursue. But the Red Sea comes together and the Egyptian army is drowned and destroyed. The Exodus demonstrates all the qualities of a great leader embodied in Moses. Moses inspires his people with a cause : to shake off the bonds of slavery. His people buy into his cause and vision. Therefore, they embark on the arduous journey, make sacrifices and take the risk of crossing the Red Sea. At the time of crisis, Moses demonstrates exceptional courage and deep faith in his mission and even pulls off a miracle. He executes flawlessly on the shared vision and takes his people to the land he had promised.

Wisdom and humility are also two qualities of any great leader. Arrogance, conceit and overconfidence are the hallmarks of a failed leader. An episode in our epic the Mahabharata illustrates this best. Before the war, both Duryodhana and Arjuna go to Krishna to seek his support. Duryodhana arrives first. But Krishna is asleep. He is arrogant and considers himself a peer of Krishna. He chooses an ornate seat at Krishna's head. Arjuna arrives later. He is both humble and intelligent. He strategically chooses a seat near Krishna's feet. When Krishna wakes up, he naturally looks at Arjuna first and promises him the first right to make a choice. Krishna tells them that he would give his army to one side and he would go to the other side completely unarmed. Duryodhana’s heart loses a beat. He is concerned that Arjuna may choose the mighty army of Krishna. Arjuna, on behalf of the Pandavas, chooses unarmed Krishna. Duryodhana is delighted as he receives “confirmation” that Arjuna is the greatest fool that he always thought him to be. Because of Arjuna’s astute choice and humility, the pandavas gain the greatest strategist with mystical powers. It would not be an exaggeration to say that this wise choice decided the outcome of the war even before the first arrow left the gandiva.

Great leadership makes a huge difference in managing countries and economies as well. Over the decades our country has witnessed a steady decline in its ability to attract quality human talent and great leaders to governance and politics with some notable exceptions. It is contended that the poor compensation of civil servants and their political masters have caused the quality of human talent in government to plumb abysmal depths. The argument goes as follows: look at Singapore. They pay their ministers and government servants so well that they attract the very best people and, therefore, have an efficient government.

While I am fully in favor of increasing the pay of civil servants and ministers benchmarked with the private sector , I think this argument is not entirely sound. . Even today, the civil service and the public sector attract some of the very best talent that is no different in quality than those attracted by the private sector. It is a little known fact that LN Mittal, the global steel tycoon recruited his core team from SAIL and not from the private sector. My friend, the late Subir Raha, Chairman of ONGC was as great a corporate leader as one gets anywhere in the world. In addition, he had the guts and courage to say that “the King has no clothes” when his counterparts in the private sector in similar circumstances squirmed and kowtowed. I am not so sure that poor pay alone is behind all the corruption, ineptitude and lack of probity in public life.

Something is missing-not just compensation. Pandit Nehru or Subhash Chandra Bose did not dedicate their lives to freedom struggle and politics in the hope of a pay benchmarked with CEOs of large companies. Most leaders we respect had given up a more lucrative career and dedicated themselves to the service of the nation. In my father’s generation, entering politics was not a matter of shame. It was a badge of honour. In my son’s generation, honest and talented Indians are repelled and driven away from entering politics There is a pervasive social perception that politics is a disgusting cesspool. Only manipulative crooks and the corrupt thrive. It may be a distorted and exaggerated perception. But perception plays havoc with its image.

In order to attract talent into public life, the issue of corruption must be tackled head on. If we are not able to do so, simply raising compensation the profession will fail to attract talent or produce great leaders.

Leaving aside honesty, the link between pay and productivity/efficiency has not been conclusively established . There is no a clear co-relation between the two. In the 1960s and 70s when US corporations dominated the global market, the CEO compensation in the US was 30 to 40 times the average worker compensation. Today it is 300 to 400 times .Clearly CEO productivity has not increased tenfold.

Ha-Joon Chang a noted economist in the University of Cambridge has asked a valid question in his recent book , “Now, if American CEOs are worth anything between twice (compared to Swiss CEOs, excluding stock options) and twenty times (compared to Japanese CEOs, including stock options), how come the companies they run have been losing out to their Japanese and European rivals in many industries?” Increased compensation alone cannot guarantee great leadership or corporate success. The “leadership thing” is more complex than compensation.