Can Narendra Modi evolve from COO to CEO?

The Economic Times - April 14, 2012

There is something seductively reassuring about operational performance improvement (OPI). Narendra Modi's speeches at business forums have been all about it and he offers himself as an OPI-delivering chief operating officer (COO), with a successful model demonstrated in one pilot state, ready to be scaled to the rest of India. This resonates deeply with Corporate India, which has improved margins and taken advantage of the rising tide of 'automatic' GDP-driven revenue growth, for the past 15 years, on the back of an almost maniacal focus on building a lean, mean, efficient, scalable supply machine that could make maximum hay when the sun shone.

Given how flabby and dirty the government machine is, there's clearly a lot to be tangibly gained by the citizen-shareholder too - as is the case with investors in India Inc - and they may well elect him for that reason. Given all the case studies he presents of his OPI genius in identifying bottlenecks, diving deep into issues and implementing smart solutions, Corporate India understands and approves. More so since heady growth has caused job inflation too, making many COOs hold the title of CEOs, equating OPI to the totality of business strategy. But even if we take it on faith that he would be able to bring OPI to all of India, including in state governments, we still need to demand much more from a person who we are signing up for a CEO leader, and here's why.

Beyond Silos
When you do an OPI, what will get done is very clear - engine tuned, rattling parts fixed, people efficiency improved, liposuction done on historical and stubborn flab to make the organisation consume less and yet have more energy, business processes reengineered, smarter inventory management, logistics, resource mix and allocation, better connect with customers through multiple touch points, etc.

On the other hand, what doesn't get done is things that improve the fundamental heath of the organisation; like coaching the leadership team to become more confident, more self-aware, or defining goals and strategy for the organisation as a whole; not task silos within it which will help identify, choose and capitalise on opportunities or hedge against threats, both of which abound in the new world as a result of environmental bombshells or competition of the future or cranky world markets.

In good times, at board compensation committees that evaluate CEOs, we were so taken up with CEOs who were doing an excellent OPI job that we forget to ask the larger, critical questions. We are now asking if a leaner, meaner, fitter organisation is, ipso facto, equipped to create continuous value as tailwinds slow down and growth must come from other ways. We are now beginning to ask CEOs: "What haven't you been doing that you could have done to make the company better positioned for the future?"

"Is being a better and bigger and smarter aircraft carrier the best place to focus the CEO energy or should (s)he think about the future of conflict in the world and whether this will be relevant at all?" "If this happens then what will you do?" "How do we grow revenues in hard times through market share increase from me-too competitors all of whom operate similar machines in scope, spread and efficiency?" Or, "is it time to change business models to get non-linear performance [that is more bang for the same effort] and how will we cope with the consequences?" Or, "should we invest heavily in overseas markets at this time, take a cut in margins, and go up the value chain there"? Mr Modi's candidacy must be similarly interrogated.

Time for Questions
When we see OPI-focused scorecards for the entire top team, with huge bonuses riding on them, we now worry that the entire top team may become a one trick pony. We ask: is there anyone who knows how to do different things should we need to? We need to ask that of Mr Modi's chief ministership too. We also ask: The CEO has delivered the numbers but is it at the cost of the organisation's culture and values? Is there enough intellect and diversity of ideas in the team or do we have a cloned bunch of pygmies around one godlike leader? Is there a harmful autocracy, with no dissent or empowerment, and what happens if the CEO is run over by a truck? We haven't yet examined these issues in the context of Mr Modi, and they could determine our country's fate.

We need to hear what his assumptions about the world and country are that will drive his agenda; we need to ask, "What is your view in this state versus Centre federalism, when you get to the Centre?"

"What is your philosophy on working in coalitions, because you most likely will have to manage one?" "How centralised will decision-making be, what sort of leadership style do you believe in?" "If China attacks us, will you ally with America?" "What about your assumptions on the economy, what about food inflation?" "What is your comment on reservations?" "How do you think about the Right to Education Act, the food security bill?" "Do you believe in trickle down?" "Do you believe in a foreign policy of nonalignment?" "What is your attitude to dissent, the emergency, China's regime of bread or freedom..."

It's time for us to ask Modi far more CEO questions, even if the majority view is that an OPI COO is what the country needs today. It is necessary but not sufficient for the leader of this complicated country now needing to revisit its values, its assumptions, its institutions.