The Leadership Test
We all have limited time, attention and energy.
But at the same time, we all face two sources of pressure. The first one is the need to perform and the second one is the need to transform.
If we only transform and not perform, there is no NOW. On the other hand, if we simply perform (which is what most of our industry/profession is obsessed about) and not transform, we have no future.
Thus, we know that we need to get the balance between performance and transformation.
In 2020, there was a desperate need to focus on transformation of our business and client experience. But the industry/profession as a whole failed to do so.
Instead of devoting some time to transformation, there was a mad obsession on extreme short-term performance. One look at what happened in our industry over the last 18-24 months.
There was a rush to gather assets (Perform) by selling New Funds. Based on the number of NFOs (New Fund Offers) launched during the last 20 months, the writing is on the wall. This one takes the cake. Everyone seemed to be busy and there were some records broken with one NFO gathering as much as Rs. 15,000 Crore ($2 Billion) of Assets.
Then there was another rush by many portfolio managers to outdo each other or to show how good they were at beating benchmarks (how they did, didn’t seem to matter as long as they did it). Many Wealth Counters including banks were jumping over each other to bring these gems (hot portfolio management schemes) to their prized customers (who were told how special they were and why they needed these investments in their portfolios over mutual funds). There was a lot of garbage sold in this fashion but once again the obsession was on gathering assets (in short – performance).
Now that this party looks like it is over for now (until the next), the question facing everyone is to decide what to focus on.
My vote goes to transformation yet again. Needless to say, every transformation comes with a short-term dip in performance. That is the price we pay for future proofing our business and building the firm of the future (and creating tremendous value).
In a Harvard Business Review post “How Leaders can Balance the Needs to Perform and to Transform”, Author Bill Taylor writes, “Dealing with either source of pressure (Perform and Transform) is tough, which is why so many leaders seem so anxious and stressed. But meeting both of them, at the same time, can feel truly daunting. The challenge of performing while transforming has become the leadership test of our time.
So how do leaders meet that challenge? How do they deliver for today even as they disrupt for tomorrow? By wrestling with three sets of questions.
The first set of questions involves managing time.
How can you handle the chaos of the present — the onslaught of constant messages, customer crises, and people problems — and also create space to hatch the future? How can you avoid getting overwhelmed by day-to-day tasks that feel so urgent, at the expense of game-changing initiatives that are truly important?
Answering those questions starts with finding concrete ways, organizationally and individually, to literally make time for the future.
Rocket Mortgage, the huge online lender, devised an approach to giving the future its due. Every Monday afternoon from 1 PM to 4 PM is explicitly set aside for the future. Programmers and app developers don’t return emails, update code, or do performance reviews. Instead, they work on ideas that have little to do with their current responsibilities and everything to do with future disruptions. The company puts a block on everyone’s calendars to help people at all levels preserve this time to work on what comes next.”
To cite another example, we did this by building an entirely new organization. Even within Happyness Factory (HF), there is a cross functional team along with the leadership team that is responsible for ensuring that HF is well positioned for the future. We plan not only for 2023 but also for 2030. We have not only grown 6 times in the last 3 years, but we have also built a firm that is obsessed about delivering amazing client experiences and helping our partners build world class firms of the future.
However, transformation does not simply mean big bang things. It can be as simple as a transformation of the way you conduct your first meeting. It can be a transformation of your value proposition for a very specific audience.
Action Step – Block a dedicated time every day to work on transformation initiatives. If possible, build a leadership team or reach out for guidance on this front.
Getting this time asset allocation right is crucial for your future.
Bill writes further, “The second set of questions involves the personal stress of leadership.
How can you solve problems that your organization has never encountered before without burning out or giving up? How can you sustain yourself in a role that feels bigger, harder, more unmanageable every day?”
The answer to this question lies in learning and seeking guidance from someone who has truly done this before. Someone who understands not just performance but has time and again managed to successfully transform and build a world class firm.
This is where you need a real accountability coach. A coach who will get into the trenches with you but will hold you accountable to the promises you have made yourself.
Thus, you need to invest time and energy in learning, experimentation and practice. You will need to invest in yourself and your firm. This is hard work. But if this was easy, everyone would have done it.
Bill’s third set of questions involves rank-and-file morale.
He writes “How can you encourage people to stay upbeat and energetic when it’s so easy to feel anxious and beaten down?
I’m not sure there has ever been a tougher time to be a leader, whether that’s running a big company or being in charge of a small team. But if you can devise answers to these three sets of questions, you have a chance to pass the leadership test of our time.”
We once again have the opportunity to transform our business and our life. We have the opportunity to pass this test with flying colours. We have the opportunity to make this the best year of our lives. More and more people will continue to need your wise counsel to navigate this uncertain phase.
The question then is “Are you ready to pass this test?”