Future Generali

A leader often needs to take tough decisions that are unpleasant but necessary. How do they deal with this dilemma?

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Rakesh Wadhwa:

Being a leader or a CEO is a tough job. They must balance the need to deliver quarterly results those 90 days. And they also need to decide if they must have tissue papers and paper cups in the pantry. So how do they really go about taking decisions without worrying about looking unpopular because they have to take those decisions, which possibly is good for business in the short term. So how do you advise, how do you suggest they should go about this?

 

Tom Peters:

They should have been working for the last 20 years to have an incredibly motivated caring group of human beings. This is not the time. The 17th of July, 2020 is not the time to start being a good person. I mean, what you said could not be more wrong. I want you to do take care of your employees. First of all, Mr. CEO, or Ms. CEO, get the hell out of your office. You don't do business in an office. Cut the number of meetings by 50%. Get out on the shop floor, get into the factory. Get into the call center. We learned about this from him then incredibly good Hewitt Packard company in 1978. And they had what was called MBWPA or managing by wandering around. And the executive’s job is to get out of the office and get down to the front line and talk to the people who are doing the work and understand their problems and help them grow. I mean, for heaven's sakes, this isn't that hard in that regard. And if you do that, you will have found yourself in a much better position when a COVID-19 or an earthquake or a flood comes along. So I'm not going to say it's too late, but just number one is to take care of people. And I would also say it is not true. I'm sure this has to be the case in India. I know it is in the UK, in the USA. It is not true that you have to deliver the maximum number of profits that you can in the next 90 days. If you have worked with your principal share owners, if you have got share owners who want you to perform well in the long term, you can pull it off.

Remember what I said, 600 companies in the United States, 400 of them went for the next 90 days. 200 of them went longer terms. And I'm sure that when they made those decisions, a lot of people in the stock market shook their heads and sold their stock. But a lot of other people said yes, and bought their stock. No Indian CEO or American CEO as a brain should get sucked into believing that the only damn thing that matters is the next 90 days. If that's what you think, send a letter to your board of directors, when this speech is over. Tell him I resigned. I don't want to be part of this. It was a guy I talked to who ran a $10 billion electronics parts company. And he and I were talking and he said, listen, you said, I told my board of directors that if they wanted me to increase our company profits by 50%, I can do it and I can do it in the next nine months. He said, I told them they did have a small problem and the problem is I wouldn't do it and I would resign, but this is a company that is valued by the market and they do have incredible results, but they're not focused on the next 90 days. I'm talking out of my own culture. I don't like to use words that are inappropriate, even though I was a sailor years ago, but the 90 day focus is bullshit and counter productive and inhuman. And as far as I'm concerned, you focus on the next 90 days and you are going to go directly to hell.

And I am not a religious person. I mean, I'm really pissed off about this. It is crap. And, here's the wonderful news for India and Germany and America and whomever, the economy actually isn't about these giant companies, the magic of economic growth in Germany or India, or the United States is what we call the SME. Small and middle size enterprises. And that could be up to a hundred million dollars. But what I'm talking about is the enterprises with 25 employees, 125 employees, maybe 500 employees. But, one of the problems with we management gurus, which is a term I hate, but it does pay the rent, is we focus on the giant companies.

Now, I don't know the Indian numbers, but in the United States, we have the fortune 500 companies, which all the people in bigger businesses who are listening to us or watching us know about the fortune 500 in the United States of America employees, 10% of our workers, 90% of our workers, nine out of every 10 of our workers do not work for a super giant company. The economy of India and the economy of the United States, it's primarily those other 90%. So I mean, I, I'm not really interested in big companies cause all the pick on these do over time is get worse. I was at McKinsey, I worked with a guy by the name of Dick foster. He was just analytic is the decades. And he did a study and this was about maybe five or six years ago, of the top 1000 companies in the United States. And I'd ask people who listened to my numbers here carefully of the top 1000 companies. And he went back 40 years. Not one, not one had outperformed the stock market over that 40 year period.

Big companies exist to do only one thing, get worse. There is an economist who said, “I'm often asked by people, how do I build a small company for myself? And I always tell him the same thing - buy a big company and just wait”. There's an awful lot of truth to that. I mean, I know I'm talking loud, but this is just my hottest button in the world. Focus on people, focus on the longterm, don’t buy the bullshit about short term profit maximization, if you do find, but frankly, I don't give a damn whether you're listening or watching or not. You aren't my people, my people are the people who care about people and make money from caring about people. And also my people are the people who are watching us with five person businesses, 10 person businesses, 50 person businesses, 75 person businesses. 100 person businesses 200 person businesses.

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