Monday, December 27, 2010

Lessons from Leaders!!

N.T Arun Kumar is the Ex-CEO with Dun & Bradstreet and I was fortunate to interview him during his tenure as the CEO talking about the various challenges and the setbacks which has to be taken into consideration as a Leader. Below is the extract from the interview

1) What are the biggest challenges you have faced to reach this position?
[ARUN]: I have had to move away from comfort zones, ‘maintenance’ roles. You see, it gets very cozy in senior roles in MNC’s and then you tend to start compromising on your ambitions and vision. I stayed focused on becoming a unique business leader, in breaking at some time soon my ‘technology-profile’ and shifting to a business profile – and to do that I’ve had to leave some cushy jobs! I believed in my unique strengths at each such change and pursued assignments that would leverage them. I joined D&B as a CIO and successfully transitioned to a business leader – thanks mostly to the opportunities I had to develop new products, meet customers (rather than do an internal technology job!), explore new geographies & markets and to participate in the business strategy rather than just execute the IT part of it! So I had to work extra, extra hard to get business’ acceptance as a leader, to get a seat at the Board as an equal as against a supporting executive. I learnt to speak the customer’s language, learnt to put business first before my department or function and finally, changed my leadership style to change my team’s attitude to business. The critical change I internalized is to be a business enabler and a customer champion and to lead from the front; to take risks that others shy away from. I also learnt the importance of trust: to trust and to earn trust – nothing is more important to a CEO than this!

2) What do you think are the pros and cons of having a situation in which there are two core CEOs rather than a single CEO?
[ARUN]: You know when I was in Citibank and Citi got acquired by Traveler’s to create Citigroup, they initially had two CEO’s. It was amusing although there was a time-bound reason for such a context – transition in the biggest M&A in the Banking world, bringing together two cultures, multiple business lines, global impact etc etc. Closer home Wipro now has two CEO’s. SAP too now has two CEOs. There are reasons for such situations that are unique to that specific organization and it cannot be generalized as good or bad. As long as the customers win, whatever works is fine! But nevertheless, internally for such organizations, it is extremely important to clarify focus areas for each CEO (geography or industry or products or business lines or skill sets based) and to draw clear boundaries so as to avoid internal confusion among employees.

3) How will you maintain a high margin at a time when clients want better prices?
[ARUN]: Innovation, Price led costing (most important) and driving efficiencies through re-usability and productivity enhancements.

4) When you look at the portfolio of businesses which you have, and you look into the future, what do you see?
[ARUN]: Lots of growth J and lots of opportunities for innovation, improvisation, market creation. We are a niche business, niche business model: we integrate 4 business lines – Credit Bureaus, Risk Management, Predictive Analytics and Information Technology – very exciting combination!

5)Tell me something about the "new image" that your Organization is seeking.
[ARUN]: Our organization itself is new and young (setup in 2005 as a captive and became a company in 2007) so there is no need for a “new” image. We pride ourselves on our phenomenal heritage: 170 years old Dun & Bradstreet which employed 4 USA Presidents and TransUnion a leading US based Credit Information provider. Our image is one of juxtaposition of the traditional & ultra-modern, combination of global and startup and an interesting mix of very niche talent. We are agile, we are caring, we are small in size but huge in impact & value! These attributes of our “image” will continue to get strengthened.

6) What was your plan of action when you took over as CEO?
[ARUN]: To create a globally successful and profitable business in the areas of Risk, Analytics and Technology, carved out of an existing captive organization. To script the vision, mission, strategy and to build a team & the organization to execute it. To infuse social responsibility in our organization’s ethos & strategy. To create a winning culture and to define our leadership agenda. And finally, to win customers! Quite a handful, right?! J I am happy to look back and see all of them achieved – thanks to my team. My Board and our shareholders have been most encouraging, empowering and supportive! I have had a dream run, so to say J

7) Where do you get your ideas, your management ideas?
[ARUN]: Everywhere J - from books that I read voraciously (and increasing eclectically!), from my colleagues (some of whom are so brilliant and daring!), from my 11 year old son (whose imagination is absolutely amazing & enviable), from invisible netizens on Twitter….I can go on and on. But mostly, to tell you the truth, I believe the best is deep inside you and being silent with yourself is the best idea generation machine one can ever get! I am learning to practice intense silence for a few hours daily…now, that’s a great idea, isn’t it?! J

8) So what's the plan in the future? What would you like to see D & B become in the next five to ten years?
[ARUN]: Our vision is to be the most trusted partner for our stakeholders, in being able to bring together risk management, predictive analytics and technology & consulting skills to help our customers become the best for themselves and their customers. Growth in alignment of such a vision is what we are aiming at, retaining our niche.

9) In your opinion, what are the most urgent ethical issues in business today?
[ARUN]: Financial integrity and transparency of governance.

10) Why are ethical business practices so important in today's society? and
11) Is ethics training just as important for working professionals? How can working professionals make better decisions on a daily basis?
[ARUN]: Absolutely important, more important than anything else. Ethical business practices are the only ones that sustain long-term. It is critical to look at our stakeholders holistically and not just at our shareholders. You know, we worked with a leading University in it’s doctoral research program in defining our model of strategic stakeholder management! Society and community development are cornerstones to a meaningful organizational & business strategy and you can’t do that without being absolutely ethical. Ethics training must be made mandatory. I remember in XLRI where I graduated from, this was given a lot of importance and the Tatas contributed actively to it. I learnt a lot from there and it left a deep impression. At D&B we have a very well defined and propagated ‘Code of Conduct’ that is our Ethics-DNA.

12) How do you think about social responsibility of the company in management decision?
[ARUN]: The two must be practiced in an inter-dependant manner. There is no alternative.

13) As it turns out, doing good is good for business, and more companies are realizing the benefits of Socially Responsible Investments (SRIs). How is your company engaged in SRIs?
[ARUN]: We believe in – and pioneered the concept of – “Individual Social Responsibility” or ISR as against conventional model of CSR. Because we believe every individual employee MUST contribute to community service. Because, as Peter Drucker said, that’s what makes for better managers, better professionals. Human Values are the baseline for becoming good professionals too. We have seen that empathetic and socially-sensitive employees go longer miles in their commitment to work, to customers and to the organization – without being incentivized to do so! We are probably the only organization that mandates a minimum of 2 hours per month community work for our employees (it’s a HR Policy in the company and employees are assigned a performance appraisal weightage against this metric!). Please see and and for some interesting details J

14)How can one find the middle path between CSR and profit maximization?
[ARUN]: As I said the two are inter-dependent and have a mutual force-multiplier effect. I believe in ISR rather than companies issuing large cheques / donations in the name of CSR. And to me quality and long-term sustainability of profits are more important than the conventional definition of “profit maximization”: social service adds those two elements to the financial health of the business.

15) In which geographical markets do you see the most growth potential for D & B?
[ARUN]: The US continues to be a huge market for us for IT and analytics. We see Asia & Africa as strong emerging potential growth areas for Credit and Risk solutions.

16) What kind of traction do you see from sectors that have been affected due to the recession?
[ARUN]: Banks & Financial Services are beginning to recover and Gartner predicts a higher IT spend in 2010-11 in this sector compared with last year. Healthcare will be big too. I also believe high-value, specialized education / learning will be a big area of growth.

17) What do you think about recruiting Freshers? How much of importance do you give to freshers? Do you think the new blood would have something to contribute to the firm?
[ARUN]: Absolutely, freshers do bring in energy and the perspectives of ‘next-gen’! But we are selective since we are a niche business and a niche business model – our current growth imperative calls for highly experienced specialists. We do want to create more specialists in our niche domains (Credit Bureau, Predictive Risk Analytics etc) and hence the occasional need for bright freshers – but it takes time, patience and a lot of commitment from folks beginning their careers to become credible in these fields. And that’s a huge challenge for us!

18) Could you tell us how you are ensuring the financials stay healthy?
[ARUN]: We are a fusion of two of the best global brands in the Information Industry: Dun & Bradstreet and TransUnion. So while we have a start-up culture, in terms of our independence and agility, we enjoy the benefit of being a subsidiary of these two global organizations. Our business is captive i.e. we only serve our parent companies and their customers so our financials are predictable and extremely healthy. We have been profitable and cash-positive from the very beginning and that is a testimony to our delivery capability and our business model. Our valuation has reached 5x in less than 3 years since inception! We have a healthy business pipeline and commitment from our parent organizations.

19)Do you think the world economy is on a way to recovery? Or is it just a temporary phase? How about in India? Is the worst over?
[ARUN]: Yes certainly (on way to recovery), though the recovery will be a slow, painful process. We are already seeing turn-around especially in export oriented sectors in India (e.g. IT/ITeS Services). What is happening in the US and specifically in the Banking/Financial Services industry is more long-drawn out and no, the worst is not yet over, it is just pulling along slowly upwards. India, I believe, is strong – our economy is growing in a robust manner and by & large the financial sector was immune to the blows from the US. A lot of companies, across different sectors, are now seriously looking at India as a growth market. Telecom, Healthcare and Technology will lead the boom.

20) How do you balance your personal and work life?
[ARUN]: In my experience (and existence!), the term “work-life-balance” is a bit anachronistic! To me, it is about work-life integration. We live in a global, all-time-zones, competitive professional milieu and increasingly find personal & professional life always inter-twining! We have to constantly straddle interests, ambitions and multiple priorities so delineating the two worlds is becoming impossible. I stay connected always both at work and to my family; I have come to realize that these two need not be mutually exclusive: as long as the common themes are passion and purpose. So I am equally at ease tweeting with my son about Pokemons while at work and responding to urgent customer/employee emails while at his music concert or reading my books! I take frequent short breaks and I give myself fully to whatever I do. Makes all the difference I guess to the word ‘balance’…. J

21)Just out of curiosity, who is your role model, We did see you the other day in the MSSW event held last month where you had come dressed similar to Steve Jobs, Is he an inspiration to you?
[ARUN]: Ha ha ha! Yes, I do admire him (Steve Jobs) more than anyone else in the business world but that’s where any attempt at resemblance stops! Jobs, to me, epitomizes resilience, grit to innovate and simply do what none has done before! Similar dress was unintentional! I don’t dare even think of imitating him! Coming to your question, I did have some terrific bosses and worked with some world-class business managers: Achal Agarwal and Ram Ramsundar of PepsiCo, Arun Jain of Polaris come immediately to my mind.
My role models are varied according to my different interests: Bhagawan Sri Sathya Sai Baba is my Spiritual Guru, my God. Amongst world leaders, I admire H.H. Dalai Lama, Lee Kuan Yew of Singapore, and Mikhail Gorbachev.
What I really get a kick out of is to see and experience leadership in everyday life, from ordinary people: Nammalvar - a simple villager who has revolutionized organic farming against all odds, some of my colleagues at work who defy time-zones and customer demands taking commitment to new heights and finally, my mother who at 62 is the most energetic multi-tasker I will ever know in my life!

22) What is your message to aspiring managers like us?
[ARUN]: Internalize Richard Bach’s message through Jonathan Livingston Seagull: Passion, Purpose and Perfection. If I may take the liberty of adding the 4th P, it would be – Plan. Management and leadership are all about – and only about – People (hey! That’s your 5th P!!). So focus on developing the soft skills and continuously improving upon them.
PS: This was done as part of the 'What CEO says' project from SMOT School of Business

Mishaal Hamza
SMOT School of Business