Business Leadership: Chanda Kochar
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Published: Tue, 02 May 2017
If one monitors much of the success that most recognized products have had in the past, one would realize that all these products have relied on proper financial planning to make it happen. It requires a style of its own, a craftsmanship that can aid in distinguishing a product from every other in the market. The role of the leader who manages this is very significant in making it happen. This raises the interest in me to pursue a career leading me to be the Chief Financial Officer (CFO) of a company. The sort of leadership skills necessary in making it happen is exhaustive in nature. It covers areas related to sales management, product management, advertisement, promotions, channel management, financial planning and accountancy. With such diversity, a CFO’s role is highly challenging from a leader’s perspective. He is required to be highly analytical in his day-to-day approach as well as equally creative in planning his finances to lead the company to success. Even those areas which do not have a direct impact on finance and accounting are in some manner associated with reaching the financial objectives. So, a CFO has to co-ordinate with even such departments including information technology, public affair, HR management, marketing management, production etc. This certainly helps in understanding the challenges that a CFO has to take care of. One can very well understand this in terms of co-ordination that the CFO needs to have with the information technology department. Every promotional ad that is made these days is dependent on the extent to which a company can afford it. As for example the famous zuzu ads given by Vodafone are highly technology dependent. In other words, a CFO, rite from the time he is chosen as one has to deal with the most complex of the challenges of the corporate world. (McGirt, 2007)
As far as my personal leadership philosophy is concerned, a leader is required to be a system thinker. He is required to take care of all the people working under him. The entire organization should be worked as centralized and problems related to all need to be solved by a leader. This can be seen from all the leadership dimensions persistent in the company. As far as motivation is concerned, there should be no rivalry on grounds of favouritism in this regard. In terms of operations, a leader has to ensure that there is equal contribution from all. It is only a leader and his ways that can make this a possibility.
Also, a leader should ensure that every individual works to the best of his abilities no matter what group or team he is working for. At the same time, he should keep the organizational strategy at the broader level in mind before taking any decisions. Precisely, a leader is supposed to take charge of resolving all brainstorming sessions resulting due to conflicts in views at the organizational level. Also, with strong domain knowledge, a leader is supposed to ensure that any deficiency in terms of talent and expertise in the organization is sorted with immediate effect.
Another important parameter here is that a leader is expected to have integrity in his approach. This is because only then would he be able to set an example for his followers. Once the leader is honest in his own ways, his team would work to the best of its capabilities. This is expected to be truer for a job like that of a chief financial officer who has a big team to follow and integrity becomes the most essential part in all the team members.
Five Most important leadership skills
In the modern world of today, where one can just not afford to lose out on any grounds with the competitors, an organization has to do all that it can so as to turn out most effective. Under the conditions, effective leadership has been found to be the most significant trait to deal with the issues in the internal organization. This has been seen in case of a CFO and is viable for every other designation a person might hold. We are all aware of the fact that an organization can just not do with a half-hearted approach of the members. To make the organizations streamlined, a leader has to play an important role. Leader is a very common personality essential in every area of an organization. Leadership is the inherent quality which has to be possessed in abundance for effective leadership. The most important functionality of leadership is to motivate people to work so as to have enough efficiency from the organization’s perspective. This is a characteristic which is common in all the skills that a leader carries. Leadership can also be said to be the process by which a leader has the social influence on the people by providing them support and aids who are working for the accomplishment of a common goal. It is leadership that draws maximum contribution from an individual. A leader must possess quality leadership. He could also provide people working for him the social security so that they feel secure under him and should also be able to motivate them for common beliefs.
Also, leaders enjoy a number of powers in an organization. With these powers leaders are said to be engaged in power-politics that is using the authority for its own sake. Some authors reflect it to be unethical use of administrative power. Leaders face a lot of problems in an organization in terms of issues related to power and politics. The first one is favoring of own people in organization. Others are related to unethical use of the authority in business process. Looking at the diversities in which a CFO has to deal in, it is highly likely that there would be cases pertaining to power and politics. A leader has to be skilled enough to deal with the same. Considering all these different situations and responsibilities, it is certain that a leader requires having at least some basic skills in him so as to deal with corporate culture effectively. These traits have been listed as follows: (Mason, 2011)
Systems Thinker: A leader should take the entire organization into account before addressing any issue. Considering the competition in every field, every corner of an organization needs to be checked of its operations so as to provide the best possible final services or products. This does not only include those areas that are internal to an organization. External interaction has included the outside stakeholders in the organization system as well. A leader has to take care of this region with equal zeal as he does of the internal region of the organization. Every bit of favouritism should be avoided and performance appraisal methods should felicitate only those employees who deserve. (Shead, 2010). From this, perspective, there are eight different traits required in a leader to be a systems thinker. These have been listed as follows:
Forward looking: This guides the leader toward successful completion of the project or work. By having an optimistic idea of the entire organization, a leader is expected to raise the level of confidence in the team members as well as in him. Ultimately, it is the overall progress of the organization which is expected by a leader.
Honest: This helps in building a non-partial and efficient relationship with both the upper administration and employees hence completing the entire internal organization. Having this approach would set examples for the team members to follow. This would be beneficial in the long run. So, this trait of a systems thinker increases a leader’s probability of success.
Broad-minded: It is necessary for a leader to be broad-minded so that small matters do not create hurdles during work. At times, a leader is expected to ignore a number of activities in the system for the ultimate benefit of the system. So, ignorance accompanied by patience helps in making this happen.
Ambitious: An ambitious leader can handle new and creative projects more willingly. Being a systems thinker, a leader can very well distribute work load amongst the organizational members. This would make it easy for the new projects to be handled. A reason for the same is that only a leader who is a systems thinker would be able to know distinguished qualities of every individual within an organization, thus using his ambitious nature to work it best for overall success.
Competent: There is competition in business everywhere. The leader must be competitive in order to survive. Only a systems thinker can afford to be competitive. He would thus know the areas which would serve as core competencies for his team and improve accordingly to beat the competitors in every respect.
Caring: A caring leader motivates and manages workforce more efficiently. Here, caring does not only refer to the employees. It also relates to the reputation of the organization. This is where a systems approach comes into play. It is the emotion that a leader develops for the benefit of the organization that takes his team forward.
Inspiring: A leader who inspires his workforce better can extract more from his employees. Here again, the mentioned workforce is in totality. The motivation appeals of systems thinker is highly significant in making it happen.
Communication Skills: A leader should be able to communicate all his ideas and perspective so that it reaches even the bottom most classification of employees. In fact personal interaction should be most possible so that it is justifiable to all. Communication skills required in a leader can be better understood as follows:
Interpersonal Role: This is a role of a leader that provides information to all the other parts of the organization. Also its purpose is to receive feedback from the rest of the organization. The following characteristics come under this:
-Figurehead: A leader should create an impression amongst the organizational members so that his orders are respected and he is considered worthy enough to have the final say in organizational issues. This can be developed by giving equal opportunities to all the members. In other words, a leader has to be a common favorite for an organization to succeed. Here, the concept of election can be taken into account for getting the best results. One must understand that it is the job of a leader to create an employee friendly environment. This is much associated with the organizational success. The reason for the same is that once the employees are contented enough, they would be ready to deliver the best possible and hence make the best fortunes for the organization. (Communication skills for the Leader and Manager , 2011)
-Liaison: Communication skills are not only handy within the organization. An equitable responsibility exists for maintaining outside relations. A leader is a representative of the organization. The ways in which he deals with the people external to the organization, decides the forward link. Patience as well as intelligence at the same time is extremely fruitful in making this a possibility. None of the functionalities in a system would be required if a leader lacks in this very requisite.
Informational Role: This performs a processing on the information provided by the organization and gives it to decisional authority. Its basic functions are:
-Monitor: There are numerous activities going around in the vicinity of an organization. A leader is expected to manage them all. But when the strength of an organization is big, monitoring every department would not be possible for a leader. Here team work becomes important. A leader would monitor the different teams in on organization by maintaining terms with the sub level leaders.
-Disseminator: Every bit of information that originates from a leader should be disseminated at an appropriate time to all the departments of the organization. This has a number of benefits associated with it. The first is that once the shop floor staff knows the strategies of the organization, they would be able to incline themselves accordingly. Also, they would develop respect for the leader having been given the privilege to have access to vital information about the organization. This ultimately lifts the work spirit of the entire organization. The skill also lies in laying the boundary between the confidential information about the organization and access of the same to the employees. Every level should certainly have authenticity of information. So, a leader has to establish a trade-off between accessibility and security at the same time. This is where the disseminator quality of a leader comes into play. (Forster, 2010)
-Spokesperson: This is another important communication skill of a leader. No matter who does the backhand work and the scripting, it is finally the leader who is the spokesperson. So, this trait determines the presentation skills of a leader. It marks the beginning of association of an organization with another.
Good Listener: A leader should give equal opportunities to all his team members so that they can contribute to the organization’s welfare. A direct interaction of a simple salesman with customers could be very useful for the leader to incorporate changes if required.
The following are the common errors made by the leaders at the workplace which results in disturbed organization of employees and colleagues sometimes when a leader is not a good listener. This typically reduces the loyalty of employees towards the leader. It also makes the employees less satisfied by the job environment and thus results in increased job turnover and thus decreased productivity.
Feeling that the leader alone is responsible for carrying out the responsibilities of an organization can widen the gap between the employees and the leader. All the skills that have been discussed so far would go for a waste if this persists in a system.
If a leader wants everybody to like him, he would probably never be happy with his team. This would result in failure of substantial magnitude. Whenever there is a brainstorming session, there would have to be a solution. It is the job of a leader to be wise enough to get to the correct conclusion, but this is likely to create dissatisfaction for those speaking against the final solution. The leader has to make an attempt to convince the opposition but not waste resources in overdoing it. Until or unless there is no bit of favoritism involved in it, it would be safe for the organization.
Excess socializing can also be a hindrance for the organization. It is a challenge for a leader to be able to draw the line between the organization and its external associations. An excess of socialization would reduce the bargaining power of the system. It can have a magnitude of affecting the core competency of the system as well.
Also, if a leader is always in a spree to prove that he has the best solution, would go for nullifying his effect. A leader should always appreciate others solutions and only under suitable conditions he should discard others’ says.
Becoming friend of the employees is never a good practice. A leader is supposed to create an interactive atmosphere but here again; there should always be a difference between the leader and the team members. If this does not persist, the team would lose accountability. There would be nobody reporting to the leader and the work discipline would vanish. Hence, here again a leader has to maintain a balance in the work culture.
A leader is not supposed to do everything himself. This would increase the probability of dissatisfaction amongst the team members because of work scarcity. Also, a feeling of mistrust starts to exist under the conditions. So, a leader is supposed to trust his team mates and distribute work justifiably between each member.
These are the common errors made by the leaders at the workplace which results in disturbed organization of employees and colleagues sometimes. This typically reduces the loyalty of employees towards the leader. Hence, a leader is expected to keep his ears open to every requirement of the organization and as seen in almost all the cases maintain a balance in communication. (POSNER, 2007)
Innovation: In this world of today where demand lives on the direction of innovation, a leader is expected to be highly innovative in his means to be able to replace every function as soon as it becomes traditional no matter how quickly it happens. Innovation does not only relate to using new technology in improving the pace at which an organization works. (Forster, 2010) In fact every dimension of the system requires innovation. If one considers the human resource system for example, it would need innovation in its management. In the recent days, there used to trade unions in every organization. Today there is no room for such trade unions. As soon as the corporate world saw the need to put it to an end, it did so which has made today’s smarter employees easy to be managed. Also, the style of leadership needs to be innovative these days. The old system of tall hierarchies should be removed completely. The degree of customization in this respect depends upon the perception of the leader about his team members. Also, the degree of motivation in the employees suggests the type of organizational structure followed. For an organization where the employees are motivated from initial times, a flat hierarchy could be followed. For others it would be customized as required. Also, a leader is expected to show innovation in the manner in which he approaches the external world. Even in B2C businesses, the customers are smart enough to seek value addition whenever they are approached. Innovation in terms of technology, work process and delivery is highly material under the circumstances. If this does not take place, the organization is bound to succumb to competition. Also, managing a business requires innovation. The entire supply chain from procurement to customer service requires innovation. A very recent manner is the use of innovative IT solutions in the operational process. This can be possible by using innovative solutions of ERP, CRM etc. It would automate the process as and when a leader feels that one should incorporate changes in the same, he should go for some innovative measures of doing it. (Lee, 2011)
Decision-making abilities: A leader should have the prowess to be fast in decision making at the same time consider all the pros and cons of the decisions. A lot of the organization’s effectiveness depends on the decision making capabilities of the leader. Here again, there should be consensus of the entire team before a decision is made. This means that whenever required, a leader should have the confidence to gather the entire team at work and reach to the most viable decision taking every constraint into account before reaching to conclusions. There a number if errors a leader is likely to incur in this area. They have been mentioned as follows: (Forster, 2010)
Making natural decision-The world is changing every moment. Under such situations, it is not feasible for a leader to make natural decisions. There are a number of occasions where what seems likely is not what is suitable. This requires that a leader is not lethargic in his ways. A natural decision would never lead to accelerated progress. Current demands which are mostly latent in nature do not recommend such form of decision making. So, a leader should be appropriate rather than predictable which is also a threat from the competitive point of view.
Being defensive when mistaken- A leader’s confidence is seen during times when he is actually mistaken. Rather than becoming defensive under such conditions, a leader is expected to react in the best possible way so as to resurrect from this situation. This will test the leader of his ability to adapt to change in policy. Also, it is fact that learning comes from failures. A leader is expected to believe in this fact and follow the same so that his team members also get the inner strength to get over their mistakes hence improving the morale of their entire team.
Giving praise to employees for their answers- There is always a difference between appreciation and praising. A leader is expected to maintain this difference so that none of his team mates develop an impression of favoritism in any of his deeds. Consistent appreciation for good work would result into a healthy competition within the organizational environment where as praising a person again and again can even lead to high attrition rates.
Development of three leadership skills
Communication Skills: This can be developed by consistently understanding the needs of the corporate both within and outside the organization. The reason for the same is that once there is sufficient understanding, communication would be made easier. It is not easy to develop communication skills in a system where there is substantial bit of diversity. We have seen the case of a Chief Financial Officer. The team or the group of teams that he has to handle is huge. So, understanding the needs of every person would be highly complex if one takes personal interviews. A consistent round of questionnaire should thus be distributed amongst all the team members from time to time. This questionnaire should include all aspects of work culture. Also, it should have a portion for personal views of each employee. This is highly important because better communication can only be established if a leader is able to understand the views of all the employees and the other team members who work under him. Even the factors which are taken into consideration in the questionnaire should depend on the type of situation existing in the industry at the time of survey. The reason for the same is that, it will fetch the latest problems that people have and be more effective in decision making. As for example, during the period of recession the requirements of team members would have been different from otherwise normal occasions. As such periods are highly critical; a leader needs to have even better communication with the team members. So, questionnaires need to be customized accordingly to reflect the time of distribution.
Also, there should be training period to improve communication. Working with a diversity of people would mean that there would be different levels of communication between the team members. This could be with respect to language, motivation, level of understanding etc. This can be developed in a span of 4-5 years by getting across all the different situations of business that can arise in an organization.
Communication can also be improved by shifting designations. In a span of around 4-5 years, if a person shifts his position in the company, he would get to interact with a greater diversity of population. As a result of this, he would be acquainted with more number of situations in hence develop into a better communicator of things. The position of a CFO should only be given to that person who has the experience of leading different categories of teams so that his experience can be put to use.
If every coveted place of an organization is given on the basis of diversities in which a person has been under, it would not only increase the team spirit in the individuals but also make them better communicators. (Leadership Communication Skills – The Importance of Connection, 2008)
Innovation: Innovation is a part of the original thought-process of an individual. But, it can be developed with respect to an industry depending upon the experience and the honesty of work so that a leader is able to understand the marker better and come up with suitable ideas at the time it is required. It is never an easy task to develop a project or a product for a company. It is also true that this can’t be done alone by practising any form of leadership. As it has been mentioned earlier, a leader is expected to have interactions with the research and development department of the company. This is one of the areas from where an innovation proceeds. A leader should be aware of all these innovations and make note of the reactions of the market after every new innovation made in the company. This would give him a better view of the corporate environment which in turn would develop his innovation skills in about 4 to 5 years’ time. This is a reactive approach towards innovation. A leader can also look for some proactive approaches in this regard. As for example, if in about 2 years, a leader feels that he is capable enough to understand the latent demands of the customers, he can design products that have no relevance with the past. A lot of stress would have to be given on reliability tests of the product before it is launched. Here, again the communication skills of the leader are under scrutiny considering the challenge behind taking up the job. There could be various example of doing this. For example the introduction of i-phone was a complete innovation of its leader, Steve Jobs who has enough experience to go for such risky innovations. The basic factor for success of this gadget is that it completely satisfies the latent demand of the customers of the product. Similarly, when Reliance introduced a phone in India that was priced as low as 75 Dhms, it sent a wave of demand across the nation. Here again proactive form of leadership can be seen in use.
Not only in the form of products, but innovation can be seen in the form of marketing to a large extent. As for example, the different forms of advertisements would largely follow innovation. We have all seen the latest zuzu ad given by Vodafone. This form of advertisement had never been seen before. But, no matter what age group one might belong to, it is highly appreciated by all. So, this teaches a lesson to all the leaders that one can make innovations not only in the form of introducing new products or services in a company. This can also be done by presenting the same product but in an innovative manner so as to attract the crowd even further.
Innovation within the organization management has also become highly important these days. HR system would not work in the same manner as mentioned earlier. A company should always use measures like free shares of the company to its employees to show them a variety of benefits. This would raise the level of satisfaction. Benefits like holiday packages, free passes, increased breaks, special meals etc can add to innovative practices in increasing HR satisfaction. Only an experience of 4-5 years would make one understand the relevance of each of these approaches in the HR system.
Decision-making capabilities: This trait can also be developed over time, concentrating more on the necessities of the customers and the requirements of the employees at the same time. Decision-making abilities develop as a result of confidence. One needs to be confident in his own mental abilities so that he can envision the situation around him which would give him the guts to take decisions. Being in the industry for about 4-5 years would mean that a leader would be able to analyse the world around him. One can’t state the level of analysis that a leader would be able to do. It all depends on how much he can break down a situation, looking at the individual parts and then providing an overview of all of them. Also, decision making can be improved by thinking critically. This means that a leader must develop the ability to be an optimist and a pessimist at the same time. Years of experience would bring forward all the possible consequences and the good possibilities of a decision. A leader should be able to grasp those that are more likely to occur before he can make a decision. For example, for every movie that is released at the box office, there is always a critical review made. If in a span of 4-5 years’ time a leader can make such a critical review before even the release of a movie, he can consider himself a good decision maker. Development of decision-making skills would also come from being able to understand the value of research. Rather than wasting too much in a particular direction, a good decision maker would know exactly what would be most beneficial. Research conducted by Coke and Pepsi is a highly suitable example to showcase the developed leadership abilities in this respect. Also, a leader can develop decision making by being able to manage the conflicts that arise within him and in the world around him. All these characteristics make up the decisive behaviour techniques including all the assumptions of risk in it. The developed parameters of a capable decision making leader would be his self-awareness, skill acquisition and improved competence. Also, an ability to appreciate decentralized decision making developed over a period of 4-5 years with the above mentioned characteristics completes a leader in this context. (Lessons in Leadership: Decision Making A Must for Success, 2010)
Woman Business Leader
Here, I would talk about the highly capable Chanda Kochar who is the MD and CEO of ICICI Bank in India. This great business leader even without completing a half century of her life holds this herculean responsibility. Also, ICICI bank, that she leads is the largest private bank in India and on an overall basis, it is the second largest bank in the entire nation. She is the head of the Corporate Centre of this bank. She was born and brought up in a city called Jaipur in western Rajasthan in India. She received a bachelor’s degree from Jai Hind College in Mumbai and subsequently pursued Cost Accountancy in the year 1982. She has done her MBA from Jamnalal Bajaj Institute of Management Studies, Mumbai. She has a financial background. In her academic career itself, she received two of the most prestigious awards of all times. She was the proud winner of Wockhardt Gold Medal for Excellence in Management Studies and also the J.N. Bose Gold Medal in Cost Accountancy for being the topper in that very year. The best of all this is that both these awards come in the same year which just personifies her domain knowledge proficiency. Mrs. Kochar has consistently appeared in the Fortune’s List of “Most Powerful Women in Business” from 2005. This is even before she got her current authority. Moreover, she started from the twentieth position in Forbes “100 Most Powerful Women list” in 2009. She has also been dignified with Padma Bhushan award which is the third highest civilian award in India. (Director’s Profile, 2010)
Mrs. Kochar’s professional career started in the year 1984 and can be divided into 3 phases. The first phase is that from 1984-1993. It was in the year 1984 that she joined “The Industrial Credit and Investment Corporation of India Ltd” (ICICI Ltd.) as a management trainee. From the early years itself she got the herculean task of Project Appraisal and Monitoring. This shows the mark of leadership in an individual who is given such tasks also in diversified ranging from Petrochemicals to Cement including Textile and Paper. The second phase was that from 1993 to 2006. It was in this intermediate phase of her life that she was sent to be a part of the core team of the bank and set it right. After 10 years of working in the same bank she was given the responsibility to be the General Manager in 1994 followed by which she became the Deputy General Manager in the year 1996. At that time she was heading the Infrastructure Industry Group of the bank. Her basic focus was to create expertise in Power, Telecom and Transportation sectors. Then the major turn round in her career was seen in the year 1988 when she became the General Manager of the bank and was considered suitable enough to lead the “Major Client Group”. In about a decade from then she started to handle Strategy and E-Commerce divisions of the bank as well. It was under her leadership in the year 2000 that ICICI started Retail business and in only 5 years it became the largest retail finance in India. Then in 2001, her qualities gave her the position of Executive Director from where she heads the entire bank. Finally, the third phase started from 2006 and c
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