IDENTIFYING AND NURTURING

MANAGERIAL COMPETENCIES
 Contents

The Perspective

- Context
- The Chosen Response of Visionary Companies

ITC - In Pursuit of Value Creation

Abiding Factors

Competencies

Managerial Competencies

ITC Managerial Competencies: Framework

ITC Managerial Competencies: Purpose and Meaning

ITC Managerial Competencies:

- Positive Indicators
- Contra Indicators

Select Readings
The Perspective

The Context

Globalisation dominates the competitive horizon. The concept of globalisation is not new, but
there are three aspects that are unique and are radically different the pace of change is faster;
the reach is unprecedented and developments in one corner of the globe can affect other parts
almost instantaneously.

Because of the intensity of the challenge, Globalisation is being talked about as the greatest
economic event of our era. It is a term that triggers strong emotions. Depending on where one is
coming from, it is either dreaded or admired, perceived either as a great leap forward or several
steps in reverse.

Globalisation throws up a different paradigm of worldwide opportunities and

interdependencies, as well as new imperatives for competitive success.

Business is a stakeholder in Globalisation and carries a heavy responsibility to contribute to the

stability of the global system. And one of the ways it can meet this responsibility is to do what
business does best: innovate, invest, and grow grow knowledge, build infrastructure, and create
surpluses.

Even though India has embarked on the reforms path to integrate the Indian economy with the
global economy, it hasnt yet experienced the full impact of globalisation. Just as water changes
to solid state when the temperature drops one degree at the 32o F mark; so will one more degree
of globalisation create a totally different reality to which corporations, as the agents of capital
and technology will have to respond and adapt.

In the light of the heightened pace of change and global competitiveness, there is a compelling
need to rapidly reposition Indian companies for extreme competitive preparedness and ensure
their successful transition from an era of regulation and protection to the fully globalised market
of the 21st century.

The competitive landscape is changing, and new models of competitiveness are needed to deal
with the challenges ahead. These responses reveal a new competitive reality demanding
organisation capabilities that will enable firms better serve their customers and to differentiate.

When competitiveness is defined as adding value to customers in unique ways, companies

must find new and unique ways to serve their customers. Parity suggests that competitors have
learnt to copy cost, technology, distribution, manufacturing and product features. Only
organisational capability remains unique. New models of competition must go beyond the table
stakes of cost, technology, distribution and product features to identify other capabilities valued
by customers. The new competitive reality first assumes product and cost parity and then argues
that competitive advantage results from the creation of organisations that can continually produce
goods and services that are superior to what competitors are capable of producing.

The truth is, theres nothing new about being in a new economy. Those who faced the invention
of electricity, the telephone, the automobile, the radio, or the transistor did they feel it was any
less of a new economy than we feel today ? And in each rendition of the new economy, the best
leaders have adhered to certain basic principles, with rigor and discipline.

The rapid pace of change in technology and competitive forces make it imperative for
organisations to re-examine the way their competencies are organised to enhance organisational
capability. Organisation capability is the DNA of competitiveness. Positioning and matching
people with the right jobs has become a critical process. Performance is also dependant on the
alignment of people capacities and competencies and capabilties to organisation strategies,
objectives and culture.
The Chosen Response of Visionary Companies

From the perspective of building a visionary company, the issue is not only how well the
company will do during the current generation. The crucial question is, how well will the
company perform in the next generation, and the generation after that, and the next generation
after that? Individual leaders have a major role to play in taking the organisation forward. But a
visionary company can tick along for centuries, pursuing its purpose and expressing its core
values long beyond the tenure of any individual leader.

COMFORT is not the objective of a visionary company. Indeed, visionary companies install
powerful mechanisms to create discomfort to obliterate complacency and thereby stimulate
change and improvement before the external world demands it.

Visionary companies ensure greater continuity in leadership talent grown from within.

Good is the enemy of great.

And that is one of the key reasons why we see so few that become great.

We dont have great schools, principally because we have good schools. We dont have great
government, principally because we have good government. Few people attain great lives, in
large part because it is just so easy to settle for a good life. The vast majority of companies never
become great, precisely because the vast majority become quite good and that is their main
problem.

First Who Then What.

The executives who ignited the transformations from good to great did not first figure out where
to drive the bus and then get people to take it there. No, they first got the right people on the bus
(and the wrong people off the bus) and then figured out where to drive it. They said, in essence,
Look, I dont really know where we should take this bus. But I know this much: If we get the
right people on the bus, the right people in the right seats, and the wrong people off the bus, then
well figure out how to take it someplace great.
The old adage People are your most important asset turns out to be wrong. People are
not your most important asset. The right people are.

In determining the right people, the good-to-great companies placed greater weight on
character attributes than on specific educational background, practical skills, specialised
knowledge, or work experience. Not that specific knowledge or skills are unimportant, but they
viewed these traits as more teachable (or at least learnable), whereas they believed dimensions
like character, work ethic, basic intelligence, dedication to fulfilling commitments, and values are
more ingrained.

To go from good to great requires transcending the curse of competence. It requires the discipline
to say, Just because we are good at it just because were making money and generating growth
doesnt necessarily mean we can become the best at it. The good-to-great companies
understood that doing what you are good at will only make you good; focusing solely on what
you can potentially do better than any other organisation is the only path to moving from good to
great.

Everyone would like to be the best, but most organisations lack the discipline to figure out with
egoless clarity what they can be the best at and the will to do whatever it takes to turn that
potential into reality. They lack the discipline to rinse their cottage cheese.

Enduring great companies dont exist merely to deliver returns to shareholders. Indeed, in
a truly great company, profits and cash flow become like blood and water to a healthy body
: They are absolutely essential for life, but they are not the very point of life.

Enduring great companies preserve their core values and purpose while their business
strategies and operating practices endlessly adapt to a changing world. This is the magical
combination of preserve the core and stimulate progress.

Valuable Insights from:

The Living Company, Arie De Geus

Dance of Change, Peter Senge
Good to Great, Jim Collins
Built to Last, James C. Collins & Jerry I. Porras
ITC - In Pursuit of Value Creation

We at ITC take justifiable pride in the fact that our company is a successful premier Indian
Enterprise, creating enduring value for the nation and for the shareholder. ITC which
commenced business operations in India in 1910 has grown into a multi business conglomerate:
FMCGs including Cigarettes; Branded Packaged Foods; Greeting Cards and Gifting Products;
Lifestyle Retailing; Hotels and Tourism; Packaging, Paper and Paperboards; Agri-Businesses and
Infotech.

A company is known by its people; and its success is determined by their competence and
commitment.

ITC has been built by successive generations of people with purpose and passion. Each
management generation is a link in a long chain. Nurturing and continuously upgrading the
quality of management is one of the keys to ITCs success.

ITCs strategic agenda is that each of its businesses becomes globally competitive; and create
new avenues for growth by blending proven skills and capabilities drawn from different parts of
the ITC Group.

Were proud of our successes, and we celebrate them. But the real excitement comes in figuring
out how we can do even better in the future. Its a never-ending process of seeing how far we can
go. The drive for progress is being never satisfied with the status quo, even when the status quo
is working well. We can always do better, we can always go further, we can always find new
possibilities.

How can we do better tomorrow than we did today? We must institutionalise this question as
a way of life a habit of mind and action.

Our commitment must be to perpetuate this vitality of ITC its growth in physical terms and also
its growth as a great institution so that this company, this institution, will last through
centuries and continue in its never ending pursuit of value creation.
Abiding Factors
Abiding Factors, are the bedrock of our organisation, which transcend functional and
managerial competencies. These are sacrosanct.

These Abiding Factors are:

Commitment to value creation for the shareholder and other stakeholders.

Living by ITCs core values.
Commitment and adherence to ITCs Code of Professional Conduct.

Competencies
Competencies are the building blocks, DNA of an organisation. They contribute to the distinctive
characteristics of each organisation and when nurtured provide sustained competitive advantage;
build highly competent managerial talent within the company, and thereby ensure continuity of
excellence through multiple generations.

COMPETENCIES can be broadly divided into FUNCTIONAL and MANAGERIAL.

COMPETENCIES are skills, knowledge and behaviour, which underlie effective managerial
performance.

Competencies are clearly defined behaviours which

Create a universal language

Set standards
Maximise objectivity in assessment
Focus assessment on demonstrable behaviours
Anchor assessment in evidence rather than unsubstantiated evaluation

Competence assessment is the route through which ones capabilities, managerial style as well as
results delivered can be discussed, and development needs specifically highlighted.

Competencies can be knowledge based and/or skill based and each type of competence has its
own set of learning contexts.

Both Functional and Managerial Competencies are equally important, in order to build a
high performance organisation.

Demonstration of both Functional Leadership and Managerial Leadership are essential for
Business Leadership positions.

Where Managerial Leadership may not be an area of ones strength, deep Functional Specialism
which contributes to ITCs competitive advantage will also be encouraged, nurtured and
rewarded.
Managerial Competencies

The Managerial Competencies have been developed from past learnings, future insights and our
strategic agenda.

For each competency we have developed purpose and meaning, to capture the overall spirit
of the competency.

Positive and contra indicators have also been developed for each competency at each work
level.

Positive indicators are examples of behaviour which produce the expected results when the
competence is employed effectively; contra-indicators state the symptoms of inadequate
competence in the defined areas.

People demonstrate different behaviours in different contexts over a period of time.

Therefore, we attempted to describe as many behaviour examples as possible. These
examples are only illustrative, and not a definitive list.

Each successive level assumes possessing competency of the lower level.

In order to win in the market place in a highly competitive environment, and to build an
Enduring Institution, we need to continuously strive towards raising the quality index of
the human resource. And, towards this objective, certain amount of stretch has been
built in while describing the competency behaviours.
MANAGERIAL COMPETENCIES
ITC Managerial Competencies

Framework

The five managerial competencies which have been identified as relevant to ITC are
depicted in the diagram.

Strategic
Mindset

1
Customer
People
Focus
Leadership
4 2

3
5 Making
Leading Things Happen
Change

These competencies individually and through a strong interplay with each other seek to create a
common understanding of the drivers of enduring performance of ITC.
Purpose & Meaning
Strategic Mindset: Success is not a matter of how packed with intelligence an organisation
is, but how far ahead it looks and how well it forms perspectives of the future. That is what
makes an organisation (or even an individual) great and enduring. A strategic mindset
enables continuous building of the organizations capacity to reinvent and regenerate itself
to successfully exploit opportunities for sustained value creation Managing Mechanisms
for Renewal and Competing for the Future.

Having a global mindset, a holistic and long term perspective. The capacity to foresee trends,
patterns, discontinuities and the associated risks and opportunities in the environment that impact
our organisation. The ability to determine direction and develop strategies to succeed in the
current business as well as create new growth engines.

Customer Focus: In the future, the real core competence of organizations will be the ability
to creatively reinvent itself to meet customer demands and realise unexploited
opportunities. Being customer-centric and focused on creating a unique preference loyalty
among customers. Engaging the companys internal processes, business knowledge,
partnerships and relationships in crafting and implementing the customer value proposition
- Managing the Customer and Creating Future Customers.

Ability to understand the customer; leverage business knowledge and functional expertise to
deliver customer value; build and nurture business relationships and partnerships; use
organisational core competencies and processes to provide customised value offerings to existing
and future customers/end users.

Making Things Happen: Creating an alchemy of great performance by combining a

culture of discipline with an ethic of entrepreneurship. The capacity to leverage resources to
consistently deliver results and value in a complex environment through world class
execution capability. Proactively managing the business environment and marshalling
support for companys plans. Managing Strategy to Action and Managing for
Excellence.

Ability to instill a sense of urgency and deliver results as demonstrated through a positive will
do attitude; decisiveness; high energy, a bias for action and continuous improvement; high
performance standards and respect for systems. Ability to manage the value creation process
through empowerment, personal credibility and maximising the potential of each resource both
internal and external. Ability to proactively manage the business environment and marshal
support for companys policies and strategies.

Leading Change: Organizations need to be built to change in order to create value on a

sustainable basis. Understanding the forces driving change, recognizing threats and
visualizing opportunities. Creating conditions that enable innovation and flexibility whilst
simultaneously managing continuity; fostering behaviors, attitudes, processes and
performance metrics that promote a culture of imagination, global competitiveness and
sustained value creation. Managing Mindsets and Leading Change for Progress.
Has the conviction and competence to accept and adapt to new situations and requirements;
comfort with ambiguity; coping with paradox; openness and fluidity in thought and the agility to
innovate. Future focussed creates strategic architecture to capture emerging opportunities.
Possesses effective communication and influencing skills to make change happen.

People Leadership: Creating an exciting sense of purpose, instilling core values, building
human capital and orchestrating processes that energize people in identifying with the
companys mission and vision to enhance value creation. Managing Meaning and
Orchestrating Winning Performance.

Assessed through the individuals people sensitivity, relationship focus and team play
characteristics; the ability to infuse passion and the desire to excel and align individual goals with
organisational goals to contribute to sustained competitive advantage. The ability to build high -
performing individuals and teams. The ability to blend personal humility with professional will;
and the ability to take difficult people decisions to protect the long-term interests of the
organisation.
 Managerial Competencies

Strategic Mindset
The Horizons
The Insights
The Perspective
Risk Management
Organisation Renewal

Customer Focus
Customer Relationship Management
Continuous Improvement
Innovation
Business Development

Making Things Happen

Decision Making
Resource Management
Environment Management
Delivering Results

Leading Change
Commitment to Change
Transformational
Communication and Influencing Skills
Champion of Change

People Leadership
Interpersonal & Social Skills
People Development
Distributed Leadership
Orchestrating Winning Performance
RESPONSIBILITY LEVEL 7
 Strategic Mindset

Responsibility Level 7

Positive Indicators

Is able to see the bigger picture.

Displays the ability to think ahead and beyond the here and now.
Is able to anticipate the possible outcomes of decisions and actions.
Understands the critical success factors in his area of work.

Contra Indicators

Acts without anticipation of possible outcomes.

Operates from a narrow functional view.
 Customer Focus

Responsibility Level 7

Positive Indicators

Appreciates the importance of the customer to the business.

Is always customer focused in his approach to work
Responds proactively to customer feedback.
Nurtures a desire to delight the customer.

Contra Indicators

Is dismissive about customer needs.

Ignores customer feedback.
Does not acknowledge the customer as the key stakeholder
 Making Things Happen

Responsibility Level 7

Positive Indicators

Efficient
Is enthusiastic about delivering results.
Displays high energy levels.
Is a self starter - does not need to be pushed.
Spreads an air of urgency in getting things done.
Dependable

Contra Indicators

Indifferent to task completion.

Dependent on others for results.
Does not take enough initiative.
Laid-back in his approach to work.
 Leading Change

Responsibility Level 7

Positive Indicators

Welcomes new ways of doing things.

Quick learner.
Has fresh ideas.
Gets used to different situations without too much difficulty.
Shares information and accepts feedback without getting defensive.

Contra Indicators

Resists change and new ways of doing things.

Always lives in the past.
Uncomfortable in new situations.
I told you so attitude.
 People Leadership

Responsibility Level 7

Positive Indicators

Displays good inter-personal skills.

Good team player
Takes responsibility
Supports team decisions and stands by the team
Expresses views candidly.

Contra Indicators

Shirks responsibility.
Waits every time for others to show the way.
Loner does not interact with others.
Passes the buck.
Does not inspire confidence in direct reports.
RESPONSIBILITY LEVEL 6
 Strategic Mindset

Responsibility Level 6

Positive Indicators

Foresightful
Conceptual and critical thinking.
Displays an ability to sense emerging changes.
Spots trends and patterns and identifies key issues from a mass of data/information.
Grasps information quickly; picks up nuances, subtleties.
Understands how his/her role impacts others in the function.
Displays a logical thought process in day to day operations.
Uses information from diverse sources to make effective ground level decisions.
Recognises implications of decisions and alternatives.

Contra Indicators

Looks at problems and issues from a narrow individual perspective.

Cannot foresee and understand linkage of various issues within the function.
Fails to identify key issues or draw logical conclusions.
Is inward focused.
 Customer Focus

Responsibility Level 6

Positive Indicators

Can see things through the eyes of the customers.

Is aware of internal and external customer needs.
Has a fair understanding of the business.
Looks at work issues from the customers point of view
Is always pre-occupied with delivering the value proposition of the business.
Displays an understanding of the existing infrastructure, processes and tools used to
deliver quality products and service.
Is able to discern the various elements of the Companys competitive advantage vis a vis
competition.

Contra Indicators

Displays a dismissive attitude towards the customer/end user.

Is unwilling to give due consideration to feedback from customers /end users.
Is unaware of competitor activity, operations and best practices.
Does not respond to customer calls with a sense of urgency.
 Making Things Happen
Responsibility Level 6

Positive Indicators

Energetic, competitive, persuasive and results oriented.

Has knowledge of internal and external resources.
Has fresh ideas.
Demonstrates a high degree of preparedness.
Displays good planning, organising, prioritising and monitoring skills.
Displays cost consciousness and an overriding desire to get best value for money spent.
Takes regular feedback and guidance to successfully achieve planned outcomes.
Exhibits initiative in taking on higher responsibilities and works beyond his area.
Contributes meaningfully to discussions involving his/her area.
Uses mistakes as learning opportunities. Is open to feedback.
Enhances knowledge/skills base on an ongoing basis.
Executes all relevant compliance and documentation formalities within prescribed
schedules.

Contra Indicators

Focuses on task completion at the expense of quality/standards.

Passes the buck. Is defensive about non performance.
Leaves tasks/activities unfinished until the last minute.
Frequently exceeds and over-runs deadlines.
Does not take timely decisions.
Does not focus on/develop systems to review/organise work.
Is not conversant with the external environment which has a bearing on his function and
his role.
Often externalises reasons for his own non-performance.
 Leading Change
Responsibility Level 6

Positive Indicators

Enthusiastic about change.

Is imaginative.
Thinks out of the box.
Can quickly comprehend the need for change.
Open minded when presented with new perspectives.
Is comfortable with and gets used to new situations easily.
Is able to identify and remain focused to achieve desired results even in unstructured
situations.
Asks questions. Challenges and suggests alternatives and more effective ways of
executing tasks.
Listens attentively. Shares appropriate information.
Relates to people at all levels.

Contra Indicators

Is over cautious; risk averse.

Prefers to follow only the beaten track. Does not ask questions or challenge even when
required/warranted.
Can operate only in a well-defined and familiar environment.
Avoids new situations. Opposes relevant change efforts as meaningless.
Works in isolation. Is not open to giving and receiving ideas.
Is overly aggressive and abrasive in his dealings with people.
Is impatient, talks before he listens.
Is evasive in responding to questions.
 People Leadership
Responsibility Level 6

Positive Indicators

Participative, open minded and receptive.

Understands the needs/interests and attitudes of others.
Is perceptive of non-verbal behavior.
Is confident but not arrogant.
Involves others in the resolution of problems.
Brings energy and direction to activities within the Responsibility area.
Shares experiences and information with team members.
Demonstrates commitment to the team and supports team decisions.

Contra Indicators

Withholds ideas and information. Does not seek others advice even if needed.
Does not enjoy credibility within the team.
Is confused about his own stand on issues.
Is unable to adapt approach to better appeal to ones audience.
Does not interact with people beyond his scope of work.
Reacts with criticism and is defensive if his ideas are questioned.
Is unable to communicate expectations.
RESPONSIBILITY LEVEL 5
 Strategic Mindset

Responsibility Level 5

Positive Indicators

Has a holistic perspective; appreciates the role of each function and the interdependent
nature of the various functions while taking decisions.
Displays capability to foresee trends, analyse and anticipate outcomes of subsequent
developments in a situation, so as to pre-empt losses/exploit opportunities.
Displays ability to ask insightful questions, identify the core of a problem or an issue and
evaluate it from different perspectives.
Recognises differences and similarities between current and past situations and uses this
understanding as a framework for future actions.
Is able to appreciate the impact of day to day decisions and activities on medium and
long-term goals of the Unit.

Contra Indicators

Looks at problems and issues from a short term and narrow perspective.
Focuses on specific tasks/activities irrespective of whether they align to the department
or business direction
Fails to connect or draw trends from a set of issues, events or data.
Initiates actions without considering the implications and outcomes.
 Customer Focus
Responsibility Level 5

Positive Indicators

Has a good grasp of the total value chain, the key processes, technologies and
infrastructure.
Understands the key value drivers for the business; financial dimensions of decisions,
working capital management and cost control.
Listens to customers and assigns the highest priority to customers satisfaction including
internal customers.
Attends to customer feedback with zest and spontaneity.
Gathers feedback on systems, practices and processes of competing organizations
towards enhancement of focus on the customer/end user.
Builds a strong network of partner relationships at the operational level.
Is technology savvy and comfortable with contemporary technical equipment/software
applications

Contra Indicators

Is unaware of market practices and current happenings.

Cannot anticipate market positioning, its causes and effects.
Customers/end users tend to continually seek clarifications/or help on routine matters or
frequently escalate issues to higher authorities.
Interrupts /reacts before listening to customer/end user issues.
Is not able to look beyond the stated needs of the customer.
 Making Things Happen
Responsibility Level 5

Positive Indicators

Displays a positive will do approach and the desire to achieve. Spreads enthusiasm,
excitement and a winning attitude.
Displays a strong bias for action and to actively seize opportunities. Prepares action
plans and processes to achieve desired objectives.
Makes decisions based on sound business logic.
Takes calculated risks.
Copes effectively with constraints/adversities.
Sets high expectations of himself and others to continuously improve productivity,
quality and standards of excellence.
Proactively creates systems to manage resources.
Creates new benchmarks in his work area.
Provides innovative solutions to design or delivery problems.
Is a relentless and versatile learner.
Seeks out experiences that may change perspective or provide an opportunity to learn
new things.
Is well informed about the issues that impact the work unit / business.
Regularly involves relevant people in executing daily activities, workflow, material flow
and information flow.
Ensures required regulatory compliance with thought and speed and maintains good
working relationships with concerned agencies.
Maintains contact and formal work relationships with internal and external parties to
achieve business objectives.
Is well informed about the industrys and Companys contribution to economy,
employment and all stake holders.
Participates actively in Company sponsored social and community development
initiatives in his operating area.

Contra Indicators

Does not plan ahead; deals only with the here and now.
Is defensive when critiqued.
Sits on the fence.
Follows the rulebook and precedents without evaluating their relevance to the current
context.
Is more activity focused rather than results driven.
Changes plans under pressure.
Does not take initiative to draw out his own developmental plan or engage in self-
learning activities.
Is disorganized and unplanned in his work.
Is unresponsive to others developmental needs.
Does not participate in organization initiatives.
Is unable to appreciate the role that external relationships play in building the companys
image and achievement of the units objectives.
 Leading Change
Responsibility Level 5

Positive Indicators

Understands the why of change, the origin and reasoning behind various policies and
processes.
Explores and identifies opportunities to navigate through times of change.
Can manage change well.
Understands the explicit (e.g. voiced comments) and implicit (e.g. body language) cues
and deduces their unspoken thoughts and feelings.
Conveys ideas and opinions clearly and confidently, by summarizing the essential points
of information.
Over a series of interactions with others, successfully reinforces others view of self as a
valuable contributor
Copes effectively with questions /challenges when presenting views.
Is able to re-orient priorities when warranted.
Experiments with unconventional approaches. Comes up with unique and creative ideas
and solutions in the course of his work.
Thinks outside existing boundaries to generate innovative and practical solutions to
problems.

Contra Indicators

Tends to get confused during times of upheaval unless there is clarity.

Is visibly upset if things change be it processes, technology, or work location.
Avoids new situations. Tends to cling to the earlier ways of doing things.
Does not do things differently.
Cannot think of new ideas spontaneously.
Unable to communicate with clarity and fluency.
Rather than work towards an issue with an open mind, tends to be defensive and resorts
to flight frequently.
Backs off when challenged.
Changes views quickly at the first sign of disagreement.
 People Leadership
Responsibility Level 5

Positive Indicators

Leads by personal example and creates in others the desire to excel.

Energizes people to action with a sense of belonging and identity.
Lends a helping hand to others and is always willing to share ideas that are beneficial for
others work.
Helps others by giving helpful suggestions and providing a how to approach.
While being fair and sensitive to others, demands accountability and commitment to
task.
Generates a healthy in-group feeling. Mixes with peers /team members informally.
Enjoys personal credibility among team/group members.
Does not allow personalities to influence decisions.
Takes ownership of decisions.
Supportive, empathetic, positive and respectful of people.
Promotes cooperation and trust within the team.
Shares successes with the team.
Works effectively even in a team of non-chosen partners and in a non-chosen area of
work.

Contra Indicators

Is unable to sustain motivation levels /morale.

Fails to acknowledge contribution/s of others. Takes credit for others work.
Withholds ideas and information. Does not seek others advice even if needed.
Does not enjoy credibility within the team.
Is confused about his own stand on issues.
Is unable to adapt approach to better appeal to ones audience.
Holds lasting grudges.
Reacts with criticism and is defensive if his ideas are questioned.
Looks for faults rather than strengths in the work group.
RESPONSIBILITY LEVEL 4
 Strategic Mindset
Responsibility Level 4

Positive Indicators

Approaches problems and opportunities from a broad, business and strategic perspective.
Develops realistic, medium and long-range plans, with a built in anticipation of future
trends.
Has clarity on current goals and how his/her plans may be effected by external/internal
changes.
Anticipates and prepares for obstacles and unexpected developments.
Focuses beyond day to day activities. Identifies and addresses problems and
opportunities well in time.
Appraises the risks/opportunities associated with operating decisions and designs
appropriate systems for control.
Synthesises information from different sources to arrive at sound decisions.
Can connect experiences and generate new perspectives.

Contra Indicators

Fails to weave patterns from seemingly discrete and unrelated issues, concepts or
incidents.
Does not go beyond the obvious for root causes or issues.
Is unable to articulate for the medium or long term on where the department or function
or unit should be focused given the overall business direction of the Company.
Does not develop systems to address risks/opportunities in the operating environment.
 Customer Focus
Responsibility Level 4

Positive Indicators

Remains focused on creating value for customers/end users by customizing

processes/products/service to their requirements/expectations.
Builds and nurtures relationships with partners.
Involves customers and suppliers in improvement efforts.
Creates internal mechanisms for continuous feedback and resolution of customer issues.
Establishes and monitors systems, internal and external networks to deliver customer
value in quality, service, speed, responsiveness and price.
Promotes a culture of innovation.
Can effectively carry out cost benefit analyses of investment decisions in his/her area.
Integrates information from multiple sources to determine the best way forward.
Demonstrates superior business, market and competitor intelligence capabilities.

Contra Indicators

Is driven primarily by technological or functional interest rather than market needs.

Is not able to look beyond the articulated needs of the customer.
Does not monitor implementation of customer care processes.
Leaves information disintegrated and loose.
Is unaware of industry dynamics.
 Making Things Happen
Responsibility Level 4
Positive Indicators

Has the capacity to leverage resources effectively.

Has an in depth understanding of business operations.
Has energy and drive to produce best results and be part of creating something enduring.
Displays capability to deal with multiple tasks simultaneously and still produce quality
results.
Translates customer requirements into tangible processes, activities and targets.
Seeks new ideas. Challenges existing or standard approaches, processes and products
and suggests creative and viable alternatives to the same.
Manages continuous performance improvement.
Experiments and takes calculated risks with new approaches.
Encourages independent risk taking by establishing boundaries within which the team
can operate.
Acts decisively to optimise risk/benefit trade off in uncertain conditions.
Is a person on whom others rely on for advice or direction in times of need.
Has the ability to think on ones feet, develop insights, analyse and get to the core issues.
Is decisive yet not impulsive.
Is transparent in decision making.
Can achieve results even where he does not have formal authority.
Recognises the pace of obsolescence strives to revitalise skills and processes all the
time.
Ably negotiates and reaches win-win arrangements with colleagues, suppliers and
customers.
Forms cross-functional relationships. Networks and communicates.
Maintains regular and ongoing contacts with identified publics in the external
environment.
Contributes to building a positive image and public opinion about the organization, its
products and services.
Is well versed and balanced in his views on issues of public interest connected with the
company.
Represents the company in external fora including professional bodies.

Contra Indicators

Makes even simple things complex.

Decisions are not based on detailed analysis/logic.
Is comfortable with incremental changes in performance when significant improvements
are warranted and possible.
Does not proactively work towards achieving win-win outcomes.
Makes flippant statements which hurt the Companys interests.
Does not develop systems to address risks/opportunities in his operating environment.
Operates on unfocused opinion; is subjective.
Sets unreasonable targets without direction.
Does not delegate.
 Leading Change
Responsibility Level 4

Positive Indicators

Communicates the bigger picture and shares his understanding of the need for change
with others.
Intuitive
Can manage paradoxical situations and cope with ambiguities.
Does not lose his/her equilibrium in situations/events lacking in systems and support.
Is willing to put in that extra bit to get the team to work in a boundary less environment.
Can detect and correct risks and set the course in a period of uncertainty or in an
unpredictable environment.
Understands the significance and challenge of new situations and develops processes for
facilitating a smooth transition.
Anticipates apprehensions and uncertainties in times of change and seeks resources to
deal with them.
Creates transient roles and responsibilities in a dynamic environment. Navigates and
holds the team together during the transition period.
Provides an environment that enables questioning /challenging the accepted way of
doing business.
Talks with conviction. His style enables others to see the key points quickly and clearly.
Listens effectively and integrates others ideas.
Equally effective in both verbal and written communication.
Provides space to try out new ideas, taking calculated risks without violating companys
core values and the professional code of conduct.
Identifies key influence targets and mobilises their support for change initiatives.

Contra Indicators

Lacks conviction when exercising ideas.

Is unable to perform unless made in-charge of an organized and dedicated taskforce
during changing times
Demands undue compliance with lines of authority and procedures that may actually
hinder the achievement of results.
Does not appreciate new ways of doing things.
Cannot effectively communicate the need for change and address individual concerns in
this regard.
Tends to cling to the way things were done rather than identify new beginnings.
Interactions with him /her leave a sense of dissatisfaction and non-accomplishment.
 People Leadership
Responsibility Level 4

Positive Indicators

Inspiring. His/her leadership style generates involvement, commitment and enthusiasm

amongst members of his/her team.
Establishes clear goals and direction for the team, consistent with the business vision and
strategy.
Takes time out to listen to others concerns and problems.
Seeks feedback on processes and initiatives.
Simplifies organisational processes to meet people needs.
Minor setbacks do not upset him/her. Demonstrates an unwavering resolve to do
whatever must be done to produce the best long-term results.
Promotes a culture of healthy competition and collaboration.
Empowers people, sets a broad direction and enables them to own responsibility for
winning.
Has the ability to strengthen relationships and reconcile differences.
Demonstrates a belief in collaboration and mutuality.
Helps team members identify and improve on their performance. Regularly
communicates expected standards and their implementation.
Knows each team member personally, takes a personal interest in their development.
Holds frequent development discussions.
Has the ability to motivate and drive people.
Brings out the best in people. Builds superior teams.
Gives ample freedom and space but expects discipline and accountability.
Promotes a professional image both inside and outside the company.

Contra Indicators

Is not accessible to people.

Displays a Do it my way attitude.
Is more of a boss than a coach.
Cannot define clear roles for others.
Sees subordinates as potential competition.
Does not invite interaction beyond scope of work.
Fails to acknowledge contributions of others.
Reacts to criticism. Is defensive, even irrational when his ideas are counter argued.
Gets into arguments with people who do not comply with his thoughts.
Team members are not clear about how their roles contribute to the overall department/
SBU success.
Makes key decisions concerning the team without discussion.
Abdicates to team instead of participating responsibly.
RESPONSIBILITY LEVEL 3
 Strategic Mindset
Responsibility Level 3

Positive Indicators

Foresees the impact of opportunities and challenges on current and future business
strategy with a global perspective.
Generates ideas to reshape the function/business over the long term and constantly
thinks of new ways to stay ahead.
Is able to formulate and communicate a compelling picture of future success for the
business.
Develops a framework and methodology to manage risk.
Aligns internal business processes to the companys vision.

Contra Indicators

Follows the beaten track. Is not able to align business initiatives with the companys
current operations and vision.
Is not sensitive to the opportunities and challenges that could have a significant impact
on the business.
Unaware of happenings, concepts and trends shaping the market/profession.
 Customer Focus

Responsibility Level 3

Positive Indicators

Understands and anticipates the changing nature of customer preferences.

Drives implementation of quality processes, standards and outcomes that are focused
towards delivering the value proposition.
Leverages business knowledge and functional expertise to influence the realignment of
the existing business strategy to best suit emerging markets and consumer behaviour.
Nurtures strong business partner relationships with key vendors/ suppliers at a strategic
level.
Is constantly updated on international best practices and benchmarks.

Contra Indicators

Continues to focus primarily on operational issues.

Is unable to recommend any changes in strategic direction.
Does not actively engage in sourcing benchmark systems and processes impacting the
delivery of enhanced value to the customer/surpluses to the company.
Is not adequately aware of international best practices and benchmarks.
Displays a lack of understanding or appreciation of the financial impact of strategic
decisions.
 Making Things Happen

Responsibility Level 3

Positive Indicators

Combines the ability to envision as well as strategise for world class execution
capability.
Supportive and integrative.
Proactively resolves issues arising out of emerging gaps between strategy and
implementation.
Creates processes to sustain organisational energy around vital issues.
Provides the framework within which clear roles and responsibilities may be established
to execute results.
Takes timely decisions by simplifying issues; not always waiting for 100% information.
Evaluates and converts risk to opportunities in ambiguous situations and develops
unique solutions.
Resourceful has the ability to act effectively and inventively, especially in difficult
situations. Has the courage of conviction to get these ideas implemented.
Demonstrates an unwavering resolve to do whatever must be done to produce best long-
term results, no matter how difficult.
Can link and cross-fertilise dispersed knowledge, skills, ideas, competencies and best
practices across Units.
Continues to strive for break-through improvements.
Encourages others to look at existing situations in new ways.
Manages continuous performance improvement by driving productivity, innovation and
growth.
Is restless in pursuit of major functional improvements and successes.
Sets standards to monitor the continuous improvement index.
Develops a framework and methodology for managing risk.
Has a thorough knowledge of the Companys position on key issues, which are critical
to the business; and can articulate and present the Companys position effectively when
required.
Establishes internal communication systems to disseminate information about the
organizations commitment to the importance of statutory compliance, corporate
governance etc.
Can sensitise managers at unit/divisional level on the need for healthy environmental
linkages.

Contra Indicators

Content with status quo.

Insists on reliving the past and doing things the way they have been done before without
due regard to the context.
 Insists on establishing processes and systems that inhibit effective and efficient
achievement of outcomes.
Spends inordinate time in discussing issues that inevitably results in delayed action.
Does not continuously monitor performance against expectations, consequently failing
to provide the means for early correction of incorrect or inadequate decisions.
Does not have the flair to network appropriately.
Gets involved in trivial/routine/level decision making/implementation.
 Leading Change
Responsibility Level 3

Positive Indicators

Displays a transformational mindset.

Promotes a culture of change.
Acts as a catalyst and champion of change, motivating others and building a
commitment to implement change.
Constantly thinks of new ways to stay ahead. Has the ability to come out with new
concepts and perspectives
Creates opportunities for people to be heard.
Encourages dialogue and debate.
Can confront harsh realities.
Involves all parties in the process of change and proactively manages resistance to
change by providing appropriate support and anchors.
Communicates persuasively, marshalling logic convincingly to gain acceptance of the
course of action being recommended both within and outside the system.
Develops plans and processes for facilitating a smooth transition of roles in a changing
environment.
Demonstrates a calm disposition and determination even in the face of uncertainty and
upheaval.
Maintains a valuable network of contacts across business areas to drive and support
initiatives.
Has made at least one significant path breaking contribution in the last two years, which
has impacted business results in a significant way.

Contra Indicators

Is unable to articulate the need for change or provide a direction towards a new way of
conducting business, setting systems.
Does not encourage independent and boundary less thinking. Insists on following the
rules.
Shies away from addressing people concerns and taking ownership.
Remains anchored in the past.
 People Leadership
Responsibility Level 3

Positive Indicators

Acknowledged as a Role Model.

Can provide meaning and value to work of people.
Regularly involves people in deciding how to achieve the organizations vision thus
giving them a sense of involvement.
Develops and nurtures organisational values.
Ability to sustain organisational energy around demanding objectives.
Ability to create an exciting, demanding work environment.
Recognises and rewards success by giving people a sense of accomplishment and by
making them feel that they belong to an organisation that cares about them.
Creates an environment where talent and potential are recognized, encouraged through
formal coaching & performance management systems.
Mentors and coaches. Systematically builds successors.
Has the ability to mobilise every ounce of emotional and creative energy.
Is open to disagreements and critical evaluation.
While being sensitive, is hard-nosed about performance targets and accountability.

Contra Indicators

Cannot foresee future consequences.

Avoids taking a stand on issues.
Cannot generate trust in the working environment.
Uses hierarchical authority and position to convince and sell.
RESPONSIBILITY LEVEL 2
 Strategic Mindset

Responsibility Level 2

Positive Indicators

Displays the ability to organise and invest for the future.

Adopts innovative new methods and technologies ahead of the outside world.
Can envision future products, markets, competitive advantage and the required
capabilities, in order to generate continuing sources of revenue for the company.
Cognizes for the risks and opportunities under alternative scenarios, enabling the
business to realize greater rewards.
Has a global perspective of emerging technologies, trends, patterns and discontinuities
that will impact the business, and can put appropriate strategies in place.
Has a deeper understanding of the political, economic, regulatory, societal and
demographic factors and lifestyles that could be used to transform industry boundaries
and create new competitive space.

Contra Indicators

Spends too much time managing the present and not enough creating the future.
Does not capitalize on opportunities that have a significant impact on companys
products, services and markets.
 Customer Focus
Responsibility Level 2

Positive Indicators

Is a repository of information on the industry and its dynamics and uses this information
to shape companys strategies and policies.
Extremely sensitive to environmental changes and responds to them in a timely fashion.
Looks for ideas and concepts, both within and outside ITC to enhance customer value
and satisfaction as well as generate surpluses for the company.
Leverages current business/group capabilities for identifying new products, services and
markets.
Ensures sustained leadership of the business by exploiting discontinuities.
Promotes ongoing market place experiments to ensure that we are ahead of competition.
Sets the standards for building and nurturing strong relationships with key business
partners.

Contra Indicators

Does not encourage flexibility in processes to address individual customer needs.

Is unable to anticipate, foresee and predict business direction/priorities.
 Making Things Happen

Responsibility Level 2

Positive Indicators

Manages short-term results while systematically investing for future.

Displays ability to recognise and focus organisation on vital performance priorities.
Conveys a sense of urgency that is clear and imbibed by all.
Inspires people to set stretch goals and performance standards.
Recognised as a person with ideas and values as well as the energy and guts to do what
needs to be done.
Creates opportunities for the team to enhance their self-learning.
Sponsors learning forums for cross fertilisation of ideas.
Challenges the paradigm, thats the way we have always done it and seeks creative
ways to improve.
Can focus his divisions/functions attention on the next challenge.
Synergistically works with concerned individuals and groups in industry to play a
proactive role in influencing public policy and thereby protect the long-term interests of
the industry.
Represents the Company in Professional, Civic and Community Organizations.
Establishes a fair and responsible image of the company in the eyes of the external
environment and marshals support to promote the Companys interests.
Is aware of the main pressure groups / activists in the industry and can effectively deal
with them.

Contra Indicators

Tends to be more focused on delivering operational results rather than empowering and
creating conditions for achieving strategic targets and goals.
Is all the time disproportionately obsessed with denominator management (cost cutting,
productivity gains, downsizing, seeing figures minutely) and has no time to pay attention
to growing the numerator (growing the revenue stream and building new competencies).
Tends to get reactive and makes hasty comments on public policy announcements.
Does not have an adequate understanding of the legislative environment relevant to the
industry/Company.
 Leading Change
Responsibility Level 2

Positive Indicators

Has the commitment to hand over to future managers, the division/function, in a much
better state than he/she inherited it.
Understands and communicates the significance and challenge of the new situation and
the long-term impact of such change efforts.
Recognises and drives the rationale for blending in new ideas, while retaining good
aspects of the present.
Unlearns those habits that hinder future success; and sheds the past, which represents
excess baggage.
Develops behind the scene support and excitement for his/her ideas.
Encourages an environment for people to take initiative, value diversity and innovation.
Creates internal processes for celebrating/rewarding ideas.
Steers changes at appropriate times when such changes are necessary and warranted.
Institutes concrete organisational mechanisms to stimulate change and improvement, while
preserving the core.

Contra Indicators

Fails to practice what he/she preaches.

Insists on bringing in changes without paying heed to their need and relevance.
Is unable to articulate the need and rationale for change. Does not encourage individual
thought and action.
Remains focused on status quo management.
 People Leadership

Responsibility Level 2

Positive Indicators

Generates a passion for the Companys vision.

Has the ability to align interests, integrate ideas, build teams.
Creates management teams, which are foresightful.
Gives people challenging responsibilities to enable them to learn and grow.
Drives processes for the development of distributed leadership.
His/her mere presence stimulates the environment.
Can make tough calls when required, in the larger interests of the business.

Contra Indicators

Frequently engages in murmurs of discontent and dissonance about the organisation and
business.
Jeopardizes teamwork by getting too involved in micro dealings or by making
incomplete or misguiding statements.
Is unable to work with a wide variety of people.
Builds a coterie of favored people to the exclusion of others. Is not easily accessible to
people.
Excessively depends on command, control and compliance and neglects empowerment
and development.
SELECT READINGS
 CREATING VALUE

In the new economy, the boundaries of commercial enterprises are beginning to disappear.
Companies are no longer self-contained organisations. The new business model is akin to an open
network based on the premise that Creating Value rests on establishing strong links with a wide
range of constituents, with all these constituents reinforcing each other.

Value creating organisations encourage people to work collectively towards shared goals to the
superordinate benefit of the organisation and value creation for the shareholder.

What is value?

Value is surplus of returns over investment or costs for each stakeholder

What is a value proposition?

A customer need that we wish to focus on,

A solution we offer to create value for the customer,
An articulation of why our solution is superior to the alternatives in the market place,
when the consumer feels that he is getting more value than the price he pays,
when we realise more price than our costs, hence generate a surplus,
And we have a plan for keeping some of the value for our investors.

INSIGHTS INTO VALUE CREATION

The answer to developing a good strategy is not merely putting in place new planning processes
or better-designed plans. The answer lies in understanding two fundamental points: the benefit of
having a well-articulated, stable purpose, and the importance of discovering, understanding,
documenting, and exploiting insights on how to create more value than other enterprises do.

In strategy formulation, managers are encouraged to focus less on the action plan or perhaps
even the articulation of the strategy itself - and more on the insights. Planning processes may not
be strategic (and may not even be worth engaging in) unless they focus initially on defining the
insights from which the strategy will be developed.

Insights into value creation are in-depth understandings of the needs of stakeholders that allow
one to discover superior ways of creating value. These insights normally focus on practical issues
and point to new ways of doing things. They can be about relationships with suppliers, about new
ways to attract talent, the needs of a particular group of employees, about customer segments, or
about the value equations used by shareholders. Sometimes these insights are grand ideas that
seek to completely reconfigure the company or the industry. More commonly, they are insights
that a particular process can be performed differently or by a fewer people or that a segment of
customers requires a new service.

To quote some examples: Insights about value creation at Marks and Spencer are primarily
about the way suppliers are selected and managed and the way employees are treated. This has
enabled the company to maintain unusually high control over quality without incurring high
costs. The insights at Canon are about how technologies can be combined in more innovative
ways. This has led to a string of new products that continue to expand the companys technology
base in a virtuous circle. The insights at Body Shop are about the value that employees and
customers attach to natural and environmental products.
The stakeholder model is helpful in explaining the rules of the economic game and the link
between stakeholder value and competitive advantage. Companies must win and retain loyalty
from each of their active stakeholders: shareholders, customers, employees, and suppliers.
Without support from all four groups, companies cannot function they cannot finance
themselves, sell their products, attract talent, or purchase the supplies they need. These
stakeholders are active not just because they have a commercial relationship with the company
but also because they are infinitely demanding: they want to get as much as possible out of the
relationship. Their demands are fueled by the existence of competitors.

An enterprise can only afford to deliver adequate value to all its stakeholders if it has unique
competitive advantages. As a result, our economic system demands that companies have as one of
their driving objectives, the search for and the creation of sources of unique competitive
advantage.

Competitive advantage, whatever its source, ultimately can be attributed to the ownership of a
valuable resource that enables the company to perform activities better and more cost
effectively than its competitors.

VALUE INNOVATION

Value Innovation is the simultaneous pursuit of radically superior value for buyers and lower cost for
companies.

Conventional Logic vs. Value Innovations

Conventional strategic logic and the logic of value innovation differ along five basic dimensions
of strategy. Those differences determine which questions managers ask, what opportunities they
seek and pursue, and how they understand risk.

Industry Assumptions: Many companies take their industrys conditions as given and set
strategy accordingly. Value innovators dont. No matter how the rest of the industry is faring,
value innovators look for blockbuster ideas and quantum leaps in value. They seek to change the
rules of the game.

Strategic Focus: Many companies let competitors set the parameters of their strategic thinking.
They compare their strengths and weaknesses with those of their competitors and focus on
building advantages. Consider this example. For years, the major U.S. television networks used
the same format for news programming. All aired shows in the same time slot and competed on
their analysis of events, the professionalism with which they delivered their news, and the
popularity of their anchors. In 1980, CNN came on the scene with a focus on creating a quantum
leap in value, not on competing with the networks. CNN replaced the networks format with real-
time news from around the world 24 hours a day.

Customers: Many companies seek growth through retaining and expanding their customer base.
This often leads to finer segmentation and greater customisation of offerings to meet specialised
needs. Value innovation follows a different logic. Instead of focusing on the differences among
customers, value innovators build on the powerful commonalities in the features that customers
value. They believe that most customers will put their differences aside if they are offered a
considerable increase in value.

Assets and Capabilities: Many companies view business opportunities through the lens of their
existing assets and capabilities. They ask, Given what we have, what is the best we can do? In
contrast, value innovators ask, What if we start anew? As one of Virgins executives put it,
We dont let what we can do today condition our view of what it takes to win tomorrow. We
take a clean-slate approach.

Products & Service Offerings: Conventional competition takes place within clearly established
boundaries defined by the products and services the industry traditionally offers. Value
innovators often cross those boundaries. They think in terms of the total solution buyers seek, and
they try to overcome the compromises their industry forces customers to make.

The race never ends. No companys strategy can endure without continual pressure to improve.

Valuable insights from:

Whats Wrong with Strategy, Andrew Campbell & Marcus Alexander, HBR, Nov-Dec
1997
Value Innovation: The Strategic Logic of High Growth, W. Chan Kim & Renee
Mauborgne, HBR, Jan-Feb 1997
Competing on Resources, David J Collis & Cynthia A Montgomery, HBR, July-August
1995

Big corporations have emerged as perhaps the most important social and economic institutions in
our modern society. They are much more than money making machines and hold society together
by providing it with the means of progress. The problem is that their managers dont always
understand this bigger role and, if they do, they dont always like what it implies. It is crucial for
our societies, that managers wake up to their new role and, more than that, that these giant
organisations learn how to re-invent themselves so that they can go on producing wealth and
drive progress for us all

- Sumantra Ghoshal
 TOWARD AN ATLAS OF ORGANISATIONAL CHANGE
- Peter Senge
From Dance of Change

Look ahead twenty or thirty years. Does anyone expect the next twenty years to be less tumultous
than the last twenty years ? Given the changes expected in technology, biology, medicine, social
values, demography, the environment, and international relations, what kind of world might
humanity face ? No one can say for sure, but one thing is reasonably certain : Continuing
challenges will tax our collective abilities to deal with them. Failure to rethink our enterprises will
leave us little relief from our current predicaments : rising turbulence causing rising stress;
increasing disconnection and internal competitiveness; people working harder, rather than
learning how to work smarter; and increasingly intractable problems beyond the reach of any
individual or organisation. If you are an organisational leader, someone at any level concerned
deeply about these challenges, then you face a daunting task. In effect, you are engaged in a great
venture of exploration, risk, discovery, and change, without any comprehensive maps for
guidance.

Leadership is the art of accomplishing more than the science of management says is possible.

-General Colin Powell

US Secretary of State
 THE PARABLE OF THE BLACK BELT
- James C. Collins & Jerry I. Porras
Built to Last successful habits of visionary companies

Picture a martial artist kneeling before the master sensei in a ceremony to receive a hard-earned
black belt. After years of relentless training, the student has finally reached the pinnacle of
achievement in the discipline.

Before granting the belt, you must pass one more test, says the sensei.

I am ready, responds the student, expecting perhaps one final round of sparring.

You must answer the essential question: What is the true meaning of the black belt?

The end of my journey, says the student. A well-deserved reward for all my hard-
work.

The sensei waits for more. Clearly, he is not satisfied. Finally, the sensei speaks. You
are not yet ready for the black belt. Return in one year.

A year later the student kneels again in front of the sensei.

What is the true meaning of the black belt? asks the sensei.

A symbol of distinction and the highest achievement in our art, says the student.

The sensei says nothing for many minutes, waiting. Clearly, he is not satisfied. Finally,
he speaks. You are still not ready for the black belt. Return in one year.

A year later the student kneels once again in front of the sensei.

And again the sensei asks: What is the true meaning of the black belt?

The black belt represents the beginningthe start of a never-ending journey of discipline,
work, and the pursuit of an ever-higher standard, says the student.

Yes. You are now ready to receive the black belt and begin your work.
 SOME COMPANIES LAST HUNDREDS OF YEARS
- Arie De Geus
From The Living Company

Long living companies are sensitive to their environment.

They are innovative. Not only being unusually good at what they do but at being especially
adroit at continually responding to change of any sort in their environment. As the needs of
their customers shift, the skills of their competitors improve, the mood of the public
perturbates, the forces of international trade align, and government relations shift, these
companies tack, revamp, adjust, transform and adapt in short, as a whole culture they
innovate. Visionary companies prosper over long periods of time, through multiple product
life cycles and multiple generations of active leaders, with purpose and passion.

They are cohesive, with a strong sense of identity.

Each management generation is a link in the long chain.

They husband money.

They display a powerful drive for progress, (change, challenge, creativity) without compromising
on their cherished ideals.
 THERE ARE TWO DIFFERENT TYPES OF
COMMERCIAL COMPANIES
- Arie De Geus
From The Living Company

1 The Economic Company - to produce maximum returns, with minimum resources, in the
shortest time.
It is like a puddle of rainwater - a collection of raindrops, gathered together in a cavity or
hollow. These drops are the puddle.

Puddles of rainwater cannot survive much heat. When the sun shines and the temperature
heats up, the puddle starts to evaporate.

2 The second type of Company - by contrast, is organised around the purpose of perpetuating
itself as an ongoing community.

This type of company has the longevity of a river. Unlike a puddle, a river is a permanent
feature of its landscape. Come rain, the river may swell. Come shine, the river may shrink.
But it takes a long and severe drought for the river to disappear.

In such a river company, return on investment remains important. Its purposes are
longevity and the development of its own potential. Profitability is a means to that end. And
to produce both profitability and longevity, care will be taken with the various processes for
building a community : defining membership, establishing common values, recruiting
people, developing their capabilities, assessing their potential, living upto a human contract,
managing relationships with outsiders and contractors, and establishing policies for exiting
the company gracefully.

To create a company that flows like a perennial multipurpose river, we must enrich the
sources and channels that maintain the flow.

A REGENERATIVE ORGANISATION comprises three interrelated components :

the capacity to continually reinvent its core organisational capabilities,

the capacity to distribute its leadership and knowledge capabilities more broadly throughout
the organisation, and

the capacity to create mechanisms for ongoing regeneration and renewal.

Regeneration, by definition, is a constant process. Those doing it well, become champions of

change.

- Dr. Douglas Ready

From Champions of Change
 ORGANISATIONS - CRAFTING STRATEGIC ARCHITECTURE
Prahlad & Hamel
From Competing for the Future

Not only must the future be imagined, it must be built; hence our term, "strategic architecture".
An architect must be capable of dreaming of things not yet created - a cathedral where there is
now only a dusty plain, or an elegant span across a chasm that hasn't yet been crossed. And an
architect must also be capable of producing a blueprint for how to turn the dream into reality. An
architect is both a dreamer and a draftsman. An architect marries art with structural engineering.

Strategic architecture is basically a high-level blueprint for the deployment of new functionalities
(product/service benefits), the acquisition of new competencies, or the migration of existing
competencies and the reconfiguring of the interface with customers.

We often come across companies that have set an ambitious long-term goal, perhaps to double
revenue and profits over five years, or to dramatically increase the proportion of revenues coming
from new businesses, but have devoted almost no intellectual effort or infrastructural investment
to thinking through the medium-term capability-building program that is needed to support that
goal.

There seems to be, in many companies, an implicit assumption that the short-term and long-term
abut each other, rather than being dovetailed together. But the long term doesn't start at year five
of the current strategic plan. It starts right now!

A strategic architecture identifies "what we must be doing right now" to intercept the future. A
strategic architecture is the essential link between today and tomorrow, between short-term and
long-term. It shows the organisation what competencies it must begin building right now, what
new customer groups it must begin to understand right now, what new channels it should be
exploring right now, what new development priorities it should be pursuing right now to intercept
the future. Strategic architecture is a broad opportunity approach plan. The question addressed by
a strategic architecture is not what we must do to maximise our revenues or share in an existing
product market, but what we must do today, in terms of competence acquisition, to prepare
ourselves to capture a significant share of the future revenues in an emerging opportunity arena.
 WHAT LEADERS REALLY DO
Good management controls complexity; effective leadership produces useful change
- John P Kotter

LEADERSHIP COMPLEMENTS MANAGEMENT;

IT DOESNT REPLACE IT

Leadership is different from management, but not for the reasons most people think. Leadership
isnt mystical and mysterious. It has nothing to do with having charisma or other exotic
personality traits. It is not the province of a chosen few. Nor is leadership necessarily better than
management or a replacement for it.

Rather, leadership and management are two distinctive and complementary systems of action.
Each has its own function and characteristic activities. Both are necessary for success in an
increasingly complex and volatile business environment.

THE DIFFERENCE BETWEEN MANAGEMENT and LEADERSHIP

Management is about coping with complexity. Its practices and procedures are largely a response
to one of the most significant developments of the twentieth century: the emergence of large
organisations. Without good management, complex enterprises tend to become chaotic in ways
that threaten their very existence. Good management brings a degree of order and consistency to
key dimensions like the quality and profitability of products.

Leadership, by contrast, is about managing change. Part of the reason it has become so important
in recent years is that the business world has become more competitive and more volatile. Faster
technological change, greater international competition, the deregulation of markets, over
capacity in capital-intensive industries, an unstable oil cartel, raiders with junk bonds, and the
changing demographics of the work force are among the many factors that have contributed to
this shift. The net result is that doing what was done yesterday, or doing it 5% better, is no longer
a formula for success. Major change always demands tranformational leadership.

Consider a simple military analogy: a peacetime army can usually survive with good
administration and management up and down the hierarchy, coupled with good leadership
concentrated at the very top. A wartime army, however, needs competent leadership at all levels.
No one yet has figured out how to manage people effectively into battle; they must be led.

Without managers the vision of leaders remains a dream. Leaders need managers to convert
visions into realities. For continuous success, organisations need both managers and leaders.
However, as most seem to be over-managed and underled, they need to find ways of having both
at the same time.

Perhaps the best way to handle this paradox is for managers to aim to be managers when viewed
from above (by their bosses) and leaders when viewed from below (by direct reports), and to
remember that the need for leadership grows as we move up the organisation.
 LEVEL 5 LEADERSHIP
- Jim Collins
From Good to Great

Level 5
Leadership
The Triumph of Humility and
Fierce Resolve

The Level 5 leader sits on LEVEL 5 LEVEL 5 Executive

top of a hierarchy of
capabilities and is, according
to our research, a necessary
requirement for transforming
an organisation from good to
great. But what lies
beneath? Four other layers,
each one appropriate in its
own right but none with the
power of Level 5.
Individuals do not need to
proceed sequentially through
each level of the hierarchy to
reach the top, but to be a full
fledged Level 5 leader
requires the capabilites of all
the lower levels, plus the
special characteristic of
Level 5.
Builds enduring greatness through a paradoxical combination
of personal humility plus professional will.
LEVEL 4 Effective Leader
Catalyzes commitment to and vigorous pursuit of a clear and
compelling vision; stimulates the group to high performance
standards.
LEVEL 3 Competent Manager
Organises people and resources toward the effective and
efficient pursuit of predetermined objectives.
LEVEL 2 Contributing Team Member
Contributes to the achievement of group objectives, works
effectively with others in a group setting.
LEVEL 1 Highly Capable Individual
Makes productive contributions through talent, knowledge,
skills, and good work habits
 THE POST CAPITALIST EXECUTIVE
- Peter Drucker

Even today, remarkably few Americans are prepared to select jobs for themselves. When you
ask," Do you know what you are good at? Do you know your limitations?", they look at you with
a blank stare or they often respond in terms of subject knowledge, which is the wrong answer.
When they prepare their resumes, they still try to list positions like steps up a ladder. It is time to
give up thinking of jobs or career paths as we once did and think in terms of taking on
assignments one after the other.

Being an educated person is no longer adequate, not even educated in management. One hears
that the government is doing research on new job descriptions based on subject knowledge. But I
think that we probably have to leap right over the search for objective criteria and get into the
subjective - What I call competencies? Do you really like pressure? Can you be steady when
things are rough and confused? Do you absorb information better by reading, talking, or looking
at graphs and numbers?

Managers are synthesisers who bring resources together and have that ability to "smell"
opportunity and timing. Today perception is more important than analysis. In the new society of
organisation, you need to be able to recognise patterns to see what is there, rather than what you
expect to see.

When I ask people what they contribute to an organisation, they blossom and love to answer. And
when I follow with, "Have you told other people about it?" the answer often is "No, that would be
silly because they know." But of course, "they" don't. We are 100 years past the simple economy
in which most people knew what others did at work. Farmers knew what most farmers did, and
industrial people knew what other factory people did. Domestic servants understood each other's
work, as did the fourth major group in that economy: small tradesmen. No one needed to explain.
But now nobody knows what others do, even within the same organisation. Everybody you work
with needs to know your priorities. If you don't ask and don't tell, your peers and subordinates
will guess incorrectly.

The key to the productivity of knowledge people is to make them concentrate on the real
assignment. Do you know why most promotions now fail? One third are outright disasters, in my
experience, while another third are a nagging backache. Not more than one in three works out. No
fit. The standard case, of course, is the star salesman promoted to sales manager. That job can be
any one of four things - a manager of salespeople, a market manager, a brand manager, or a super
salesman who opens up an entire new area. But nobody figures out what it is, so the man or
woman who got the promotion just tries to do more of whatever led to the promotion. That's the
surest way to be wrong.

Knowledge is power, which is why people who had it in the past often tried to make a secret of it.
In post-capitalism, power comes from transmitting information to make it productive, not from
hiding it.

I'm not comfortable with the word manager any more because it implies subordinates. I find
myself using executive more, because it implies responsibility for an area, not necessarily
dominion over people. The word boss, which emerged in World War II, is helpful in that it can be
used to suggest a mentor's role, someone who can back you up on a decision. The new
organisations need to go beyond senior and junior polarities to blend with sponsor and mentor
relations. In the traditional organisation - the organisation of the last 100 years - the skeleton, or
internal structure, was a combination of rank and power. In the emerging organisation, it has to be
mutual understanding and responsibility.
NOTES