Creating future leaders

 

Corporations do not often achieve legendary competitive advantage entirely from discipline and agility in strategy and/or execution. Neither do individual leaders achieve legendary status entirely from excellence in scripted conduct. It is the discretionary effort of its employees in going beyond the call of duty, whether in customer related or internal people related situations that sets legends apart from best practitioners. In the present global business environment, management education needs to produce leaders who are equipped to amplify the human capabilities of an organisation by channelling discretionary behaviour of its human assets in a beneficial manner.

 

More often than not, it is the grey area between clearly acceptable and clearly unacceptable conduct that creates lasting perception about a company or an individual as a leader. Legendary examples of corporate excellence, for instance, customer service at Nordstrom (employees delivering products to customers’ homes) derive their existence from discretionary, not pre-scripted actions by individual front-line workers. This poses a perplexing question for both business establishments and B-schools.

 

How do you inspire people to expend discretionary effort when discretionary behaviour, by its nature, cannot be predicted or scripted in advance? Discretionary conduct is not only difficult to predict in advance but it can also be harmful to the interests of the organisation if not channelled properly. In the earlier example of Nordstrom, the measurement of supervisor performance by sales per hour led to supervisors pressuring those same employees to under-report hours. Nordstrom was forced to settle a law-suit by floor personnel. Thus, in addition to beliefs and values that inspire desirable discretion, companies must also set boundaries to prevent abuse through undesirable discretionary conduct as in the case of Nordstrom. Shameless expression of disrespect for female employees at Hooters, uncovered in the popular TV series “Undercover Boss”, is another example of lack of boundaries.

 

 As creator of future business leaders, management education must be front and centre in facilitating that new minds entering the business world are equipped to understand the role of discretionary behaviour in corporate performance. It requires a shift in management education toward critical thinking as well as social and moral reasoning. In a nutshell, it requires supplementing the analytical and quantitative nature of management education with a study of the human element to understand what drives people to go beyond the call of duty and expend discretionary effort in the service of the organisation they are working with. It requires acknowledgement that such management challenges may not be amenable to predefined recipes and short term results.

 

Many business schools have recognised the need for this shift and have introduced ethics, leadership, talent management, cultural and other related dimensions into their curriculum. However, this shift is in a nascent state. Most critically, though, business schools alone cannot be held responsible for addressing this issue. A major collaborative effort between business schools, trade media and the business practitioners is required. In today’s world, there is little alignment between these three constituencies in defining the desirable output of business schools – skills, mindset and expectations of or from graduating students.