Close Your CSR Departments…

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Leadership and change management are perhaps the most written-about topics in organisational behaviour. Academic interest in the two subjects ebbs and flows depending on the times. Maybe it’s a natural result of the protracted slowdown in the world economy or a perceived leadership gap in both the business and the broader worlds, but, suddenly, there has been a glut of new books on these topics.

That said, the timeliness of a new book by Prasad Kaipa and Navi Radjou on leadership cannot be exaggerated: we have all said or felt at some point that we need leaders more than ever – people who aren’t afraid to get in front of the parade. Also, Mr Kaipa, a Silicon Valley-based CEO advisor and coach, and Mr Radjou, an innovation and leadership strategist and also co-author of the 2011 bestseller Jugaad Innovation, do not stop at the usual formula – putting together a recipe for perfect leadership or getting into an elaborate narrative on why followers follow.

What distinguishes From Smart to Wise is a thorough examination of the capabilities that support leadership skills at various stages of their development. Through a variety of case studies – some of them would be unfolding before your eyes right at this moment – the authors are able to demonstrate how these supportive capacities develop and mature as a leader progresses from one stage to the next.

From Smart to Wise has been made possible by more than 20 years of research on companies and their leaders, say the authors. The idea behind the book is to help leaders recognise the limitations of smartness and learn what it takes to be wise, explain the authors in the first chapter (“Wise Leaders Wanted”). They contend that each of us has different types of intelligence as well as wisdom, but over time we begin to tap into one kind of smartness and ignore the other. To that end, the book presents a framework to tap into different kinds of smartness and wisdom based on the context (internal and external), and to become effective, innovative and successful leaders in these complex times.

So what is the key difference between a smart leader and a wise one? Here’s the authors’ explanation: all leaders have to make decisions, take actions and assign roles. Smart leaders focus on action and the application of intelligence to come up with the right vision and strategy, regardless of the context. Wise leaders rely on reflection and introspection. Then they focus on noble purposes and enlightened self-interest to engage with their role fully without being emotionally entangled with it.

The authors’ idea of “noble purpose” reflects much of the recent criticism against corporate social responsibility (CSR) as being pure rhetoric and a passing fad. They contend there’s nothing altruistic about CSR and, in fact, companies should close their CSR departments, because doing good is simply good for the business. Ramon Mendiola Sanchez, CEO of Costa Rica-based food and beverage company Florida Ice & Farm, decided to do away with the CSR department by incorporating sustainability in the firm’s business model. New performance indicators were introduced so that senior managers could take the right kind of decisions that contributed towards things such as water conservation that eventually helped the firm save money and pass the benefit to consumers. And, of course, this initiative helped Florida Ice & Farm become more environmentally-friendly. Unilever CEO Paul Polman wants to double the company’s revenues and reduce its environmental impact by 50 per cent. Both examples explain how this schizophrenia (increasing profitability and creating a moniker like CSR) can be eradicated by finding a noble purpose. Companies must walk the talk by re-engineering their value chains instead of focusing on public relations exercises in CSR.

Let us try and understand this with an example. As part of its product portfolio, PepsiCo sells both obesity-inducing drinks and health products. Hypothetically, if it chooses to conduct a CSR initiative in schools, distributing healthy products such as Gatorade and Quaker Oats will make sense. Clearly, Indra K Nooyi has a purpose integrated in PepsiCo’s strategy. On the other hand, Coca-Cola does not have that balance in its product portfolio.

My “aha” moment in this book came when the authors demonstrated how wise leadership was about the ability to move from “what’s in it for me” to “what’s in it for us”.

In 1999, after Infosys became the world’s 21st company to receive CMM level 5 certification (capability maturity model level 5 represents the top level of the certified software development process), co-founder N R Narayana Murthy shared the company’s experience of the certification process with its Indian competitors. At this juncture, the information technology sector in India had not made it big. In sharing this information, Mr Murthy’s logic was to make his competitors as good a quality supplier as Infosys. In doing so, he empowered not only his competitors but also customers who could now exercise their choice while selecting the best supplier.

If you really think about it, From Smart to Wise is designed as a road map to show how to bring increased wisdom to the initiatives you take every day – whether you want to improve work relationships, develop your team, or something much bigger, like improving your organisation. If nothing else, reading this book will confirm your best instincts.

(Sourced from Business Standard, 11 July 2013)

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