Michael Grojean has been Leadership Policy Officer for the U.S Army as well as Director of HR for a 28,000 member organization. As in charge of leader development policy for the 1.4 million person active and reserve force in the US Army, he also authored the Army’s mentorship doctrine, critically changing the organizational paradigm of developmental relationships. At this time he is Professor in the Practice of Management and Executive Director for Executive Education at the Jones Graduate School of Business at Rice University. Dr Grojean’s research interests and expertise lie in the intersection between organizational change, strategy and leadership.

Though he got his start as an entrepreneurial CEO in the media sector, MB is currently Professor of Strategy & Innovation in the Department of Strategic Management, as well as Stauffer Research Fellow, at the Fox School of Business and Management, Temple University. He researches strategic issues underlying innovation and entrepreneurship, inter-organizational relationships, and emerging markets. In addition to his worldwide executive development activity, MB was named Fox School’s Outstanding Professor of the Year in 2009 and 2011 in the Professional MBA program, in the Online MBA program in 2011, and in the Executive MBA program in 2012. MB graduated from St. Stephen’s College (BA), IIM Ahmedabad (MBA), and Michigan State University (PhD).

Phase 1: When we really have clarity of purpose, it leads to success.
Phase 2: When we have success, it leads to more options and opportunities.
Phase 3: When we have increased options and opportunities, it leads to diffused efforts.
Phase 4: Diffused efforts undermine the very clarity that led to our success in the first place.

This is a situation in which success, as McKeowen puts it, is “a catalyst for failure”. He goes on to propose a cure for a pathology that he frames as suspiciously inevitable: any organization, once it’s done well at something, springboards off that success to do other things until it fails.

Strategic discipline pops to my mind every time I’m asked why St. Stephen’s Institute continues to focus energies on strengthening the Accelerated Development Program and foregoes the crowd-pleasing attractions of a Chinese menu-style course catalog with 30 or more short courses? Or, when do we plan to start an MBA course? Or, wouldn’t there be tremendous synergies with St. Stephen’s College if we offered employability training for undergraduates? Etc. My answer is always: we’ll do it when we’re ready to do it.

Ranjay Gulati, Strategy guru at Harvard Business School (and a recent guest lecturer in the Accelerated Development Program) stresses absolute focus on the customer’s pain-points, or customer-centricity, as the core of strategy:

A truly customer-centric organization (in Ranjay’s nomenclature, a ‘Level 4′ company), cannot but maintain strategic discipline. Why? Because it focuses not on internals – its technology or organizational structure or market status – but on its customers’ needs. I do not believe that a company synchronized to its customers can be trapped by ‘the clarity paradox’ simply because it will bypass Phase 3 (diffusion) in McKeowen’s sequence.

Which brings us back to the strategic focus of St. Stephen’s Institute. As can be read here on our web site, we established the Institute to offer

 every ambitious mid-career manager access to a world-class and practice-oriented business training in India.

Boosting the performance of the Indian working executive is our unrelenting goal. We deliver experiential learning: the Accelerated Development Program is led by faculty who bring to the seminar room not just strong research, but also real life managerial experience. (The Institute’s faculty roster demonstrates this.) But experiential learning is our pedagogic paradigm only because it is the best way to reach highly experienced folks. We could well attempt to widen our footprint, perhaps by starting an MBA program. But while that would leverage the Institute’s faculty and brand, and broaden its market presence and revenue, it would just as surely distract us from our target customers’ primary concern: the performance of their mid-senior executives.

Given the rapid expansion of the Indian business sector in recent decades, the Institute is  very, very, far from addressing even a fraction of the management training needs of our client companies. In line with the insights of McKeowen and Gulati, we are keeping our eyes on the prize. There will be plenty of time to test ‘the clarity paradox’.

ADP Finance instructor Suresh Krishnamoorthy at the IIC podium

The ADP instructor in Finance, Suresh Krishnamoorthy, currently heads CRC Capital Advisors in Atlanta, GA. Most recently, he was the Chief Risk Officer for ING Investment Management on Wall Street. Suresh has degrees from the Stern School of Business at NYU and IIT Madras. An experienced boardroom hand, Suresh is an ideal guide for senior executives navigating the transition into general management. I spoke with him about his recent turn teaching in the ongoing ADP.

(Interview conducted and edited by Sanjay Saigal )

SS: Suresh, this was your first time teaching at St. Stephen’s Institute. What attracted you to the opportunity?

SK: The financial crisis of 2008 has had one tertiary effect – it has put the world of global finance on the immediate radar of most companies. In interactions with non-Finance colleagues, I have recognized a hunger to understand the connection between Global Finance and their own industries and careers. Quite coincidentally, Dr C. S. Venkatakrishnan, who taught the module in January, reached out to me about teaching it. I gladly seized the opportunity. I feel it particularly important for Finance professionals such as myself who were in the thick of things during the financial crisis share our knowledge with Indian executives. By doing so, I can simultaneously teach and learn from them. The fact that the program was run by St Stephens – an institution I have long admired – made it an easy decision.

SS: Prior to the class, you received information about each participant. What were your goals for teaching Finance to such a diverse group?

SK: It is always great to have a good idea of the backgrounds of the people you are going to teach. From their background and experience, it was clear this was a very curious and smart group. My goal was not to turn them into Finance professionals – there are perhaps enough of those (laughs). My purpose was to teach them how to think about the world of Finance – understand the drivers, as it were – to appreciate the notions of risk, reward, liquidity, confidence and ethics, all of which interact in the financial world. I wanted to show how the increasingly critical role Global Finance plays in their companies’ well being.

But you cannot do any of that in a vacuum. We began with the basics, specifically, by discussing of financial instruments such as bonds, structured products, commodities, currencies and derivatives. I do believe they left with a heightened appreciation of how global macroeconomics impacts their organizations, and how they can productively influence it as they gain Enterprise-wide responsibilities.

SS: Did the fact that you had a mix of executives from public sector undertakings (PSUs) and the private companies influence it in any way?

SK: You’re right – some from PSUs, some private industry. More broadly, we had some engineers and others from backgrounds as different as hospitality and consumer durables. But, as we discussed before, I knew their backgrounds going in. My own background as an engineer helped me create a syllabus that would work across the cohort.

Now, about PSUs. In the past, PSU executives didn’t necessarily interact with financial markets. Their funding sources were captive (government) and their ROI needs straightforward. With increasing liberalization, that picture changed, and continues to change. They now compete for financial capital on a broader scale. For example, in the last few years, Indian PSUs such as the Rail and Power boards approach the US Capital Markets. Executives in these companies are increasingly asked to ‘market’ their companies to global financiers.

At the same time, the Indian private sector also needs to become more sophisticated about global markets, especially currency and commodity markets. They too are starting to tap global capital markets for their funding – for instance, witness ICICI raising funds in the UK and US.

One crucial dynamic in the class was the interaction between participants from these two worlds. They can, should, and did learn a lot from each other.

An animated tea break discussion during the Finance module

SS: Can you give me a specific example of how the module helped an attendee?

SK: One example comes to mind. On the last day of the session, Monish Mahurkar (St. Stephen’s, Economics, 1984) spoke to the class about the Asian Development Bank (ADB), where until recently he headed Local Currency Capital Markets. Monish’s description of how the ADB invests its surplus capital, led to a lively discussion about what the investment objectives of this surplus capital should be. A private sector participant initially proposed that the capital should be invested to maximize returns to ADB. But he went on to explain that based on the our preceding discussion of risk and reward he now understood how the objective for ADB would be quite different from that of his employer.

SS: Great example! But a number of the participants are from PSUs. Do you think they gained similar insights?

SK: As I remarked earlier, they are now competing in the global markets. But even beyond that, it is particularly important for executives in the PSUs to become smarter about these topics for an entirely different reason: India has always tended to view its PSUs as run by bureaucrats following a sclerotic British model of corporate governance. Even today, mention a PSU behemoth, say, ONGC, and your Finance-sector colleague may respond by rolling his eyes. But, as the Indian economy increasingly assumes global leadership, it has become critical that PSU executives be able to hold their own against the best of the best in the private industry. It is important that the Indian public become more confident that public money is being managed by smart, professional managers. We need to increase confidence in the PSUs and make them a more attractive place for top talent.

I hope that as the participants in the ADP go back to their day jobs, they are confident and empowered enough to evangelize their ADP learnings. Top quality management development, the raison d’etre of St. Stpehen’s Institute, is a critical link in building the profile and reputation of our PSUs among Indian taxpayers and international investors.

Suresh with guest lecturer Monish Mahurkar from the Asian Development Bank

SK: Let me first credit Dr Venkatakrishnan, a former colleague who has been involved in the formation of St. Stephen’s Institute since day one, for his terrific work creating the framework for Finance. He also spent a great deal of time sharing his experience in the previous ADP, as well as and his thoughts on improving it.

From a pedagogic perspective (I don’t have to tell you this, of course) our innovative use of visuals from documentaries, movies and other media really helped in keeping ADP attendees engaged and learning. Specifically, every session started and ended with a short video that was immediately relevant to that topic. For example, we used an old BBC documentary that followed three traders – in NY, London and Hong Kong – through a day of currency trading. It brought alive the subject far better than any figure-littered lecture could have.

All ADP modules extensively use interactive case studies and simulation. For my module, I used an Investment Management game that requires participants to play Portfolio Manager and experience firsthand the challenges faced by asset managers. Another example of learning by doing, but in the safe confines of the seminar room at India International Center!

SS: How do you expect ADP participants to continue to expand their financial knowledge and effectiveness?

SK: My first commandment, if I may call it that, is ‘Be curious!’ I encourage my class to read anything and everything they can get their hands on. I also encourage them to read what I call unusual writers on Finance – Matt Taibbi of Rolling Stone comes to mind. There are lots of wonderful blogs that provide experience-based learning – Mike Shedlock, Dr Brad Delong, Jared Bernstein, to name a few of my favorites. The Internet has brought the wisdom of very knowledgeable and very smart people within a mouseclick. Every moment spent away from Facebook and reading these blogs is a moment spent more wisely (laughs). Sure, in general the quality of the information on the Internet is pretty uneven. But if you’re armed with the foundation that any ADP attendee has, it isn’t difficult to separate charlatans from experts.

My second commandment would be ‘Be skeptical!’ There is a fundamental truth to Finance: if something sounds too good to be true, it is. I hope that ADP participants take that to heart. The course has given them the basic invariants in Finance, such as risk = uncertainty. I would exhort them to apply that learning constantly. They should continue to be sceptical of claims of low-risk/high-return scenarios.

The third would be ‘Seek out the naysayers!’ The people who go against conventional wisdom, such as Paul Krugman (NY Times and Princeton University) and Martin Wolf (Financial Times) are must-reads. They are extremely bright and bring a very valuable perspective to global financial issues. I urged all ADP participants to build up their own list of ‘must-reads’ and read their writings at every opportunity.

The fourth is to ‘Understand your own world!’ If there is one regret that I have about this course, it is that I couldn’t root it even further in the Indian context. While we did cover a number of India-specific issues, I would have loved to have made a case study out of Satyam Computers or cover chit funds. Then again, if I had what would I work on for my next appearance (laughs)?

SS: Thanks for your comments and once again, congratulations on a well executed module.

SK: Thank you, Sanjay, for giving me the opportunity to teach this group of whip-smart folks. I can’t wait to see them make great progress in their careers!

SS: JF, this won’t be your first engagement with St. Stephen’s Institute. You also lectured on SCM at the Institute in November 2011. Now, I know that while you’ve consulted and taught widely in the Americas, Asia and Europe, your teaching trip was your first to India. Tell us about your impressions.

JF: Beyond the mosaic of cultures, sounds and colors that is India, it is the notion of dynamic collaboration that struck me most during my first trip. Traffic patterns, for example, may look chaotic at first to the visitor, but within this chaos, each individual driver (and pedestrian!) collaborates to the flow of traffic. In doing so, they take decisions over a much broader set than in the Americas or Europe. This concept of acting locally but thinking globally appears particularly well-integrated in Indian society.

This extends into the business world as well: in my teaching I was impressed by the agility of the ADP participants in grasping and applying the concept of “globally best” decision-making across a supply chain network. Immediately after I introduced it, the participants put the concept into practice, very successfully, on a real case study.

SS: Analytic decision-making is the core of your supply chain practice around the world. How do you assess the current state of Supply Chain Analytics?

JF: Tactical and operational SCM decisions are increasingly being integrated into Enterprise Resource Planning (ERP) software-based frameworks. ERP implementations come with a large data footprint. That requires extensive Information Technology support. Market globalization has increased decision-making complexity, and ERP solutions are starting to yield measurable operational improvements in this area.

One particular drawback of ERP solutions is their excruciatingly long time-to-value. That allows companies to lose focus, even completely abandon Supply Chain improvement projects. Even worse, ERP processes and data do not easily roll up into strategic, long-range decision-making. That leaves the space of strategic decision-making still essentially served by the traditional providers of SCM services. However, strategic SCM is rarely a one-off exercise, and service-based solutions are very costly. There is therefore a fairly open market at present for dedicated, customized Supply Chain decision software and services.

SS: Do you see businesses being more open to making strategic decisions based on SCM considerations? Or do C-level executives remain captive to qualitative, 2×2 matrix type of strategic analysis?

JF: There is obviously a wide variation of answers when looking at the broad industrial spectrum, and much depends on the attributes of specific companies, their internal communication efficiency, the market they serve, and their competitive pressures. Most of the variation, however, is tied to specific key executives and their level of awareness of collaborative SCM as an enabler of competitiveness.

De facto responsibility and influence within executive management is rarely uniform, or inferable from a corporate title. So it is critical to target Supply Chain Analytics solutions to “rainmakers” – key influencers – thereby improving their individual acceptance of globally collaborative, globally optimal, strategy. Once that happens, you notice a ripple effect: adjacent business units suddenly realize the need to get on the bus, to make their operations more efficient, profitable, and integrated. That sets the entire company on the path to global competitiveness.

SS: But is this reach towards integrated supply chains and global competitiveness limited to developed economies? Or do you also see it taking hold in emerging economies like India’s?

JF: Surprisingly, some of the best Supply Chain Analytics work is going on in places other than the usual suspects – Western Europe and US/Canada. The last two decades have seen the emergence of global supply chains spanning multiple continents. Detrimental aspects aside, that has also opened the road for developing economies to take the lead in improving efficiency, reducing wastage and increasing margins for the benefit of both the local economy and the global corporation. For instance, in Peru we are assisting a major land-use project planned and executed with the help of fairly advanced Supply Chain Analytics. While it would have been far easier for the Peruvian government to invite foreign developers, it decided to build its own irrigation infrastructure with the proceeds of land sales, and do it by leveraging lower-footprint analytic expertise.

The globalization of supply chains is also leading to a gradual relocation of high-margin OEM operations, especially those tied to local tier manufacturers. Take China. It is creating end-product manufacturing facilities to take advantage of its internal rare-earth oxides production facilities. The entire supply chain, from mining extraction to production of superconducting magnets, high-capacity batteries and efficient light bulbs, has been modeled using Supply Chain Analytics techniques, leading to actionable plans looking out over an entire decade!

SS: It seems you’re bullish on the prospect for supply chain analytics in economies like India!

JF: Absolutely! If I weren’t, I wouldn’t be so excited about engaging with top-notch Indian executives at St. Stephen’s Institute. I believe that analytic competence, integrated in the supply chain framework, will increasingly separate world-beaters from also-rans. More than anywhere else among BRICS, India has an opportunity to lead, not only because of its educational strength, but because collaborative decision-making is so deeply rooted in its cultural heritage. Though I’ve been warned about the pre-monsoon summer, I can’t wait to be back in Delhi interacting with smart business executives!