Tata Group is India’s most successful conglomerate, and one of very few Indian-domiciled players on the global corporate stage. Tata’s success reflects a unique model that combines commercial excellence with a moral, principled and philanthropic approach – making it even more impressive and an exemplar for other institutions.
At the heart of Tata’s approach are its five core values – integrity, understanding, excellence, unity and responsibility. These underpin every aspect of what it does and how it does it. While at first blush they appear generic, worthy and just like the values of practically every other large corporation, in Tata they are real, meaningful and lived. In fact, more pertinently, they are assumed. Governance processes throughout Tata are defined on the basis that those involved understand and follow the Group’s values. This assumption allows those processes to be lean, purposeful and highly effective.
Tata, in this respect, illustrates the relationship between the way business leaders behave, and the nature and need for governance. Simply put, (summarized in fig. 1) the amount of process required in any institution is inversely proportional to the quality and effectiveness of its behaviours – better behaviours equates to less 'volume' of process and vice versa.
Fig. 1: Relationship between Quality of Leadership Behaviours and Volume of Governance Required
Understanding this relationship is critical to enduring high performance. This is because governance processes occupy time, which many studies have shown is any institution’s scarcest resource – especially those with ambitions to develop and grow. Business leaders need to understand the relationship is two-way and, at least in part, causal.
From one side, to minimise risk, governance processes must align with the lowest common denominator of leadership behaviour. If we want, therefore, to reduce the volume of governance, then at the same time as we re-engineer individual processes, we must facilitate the transition by implementing improved behaviours. This is a challenge both of design – identifying and articulating the required 'behaviours to win' – and of development/enforcement. Tata’s values are at the core of its competitive advantage precisely because of their effectiveness in reducing the need for governance.
The other side of this relationship, which we should also understand, is the capacity of governance processes – either inadvertently or by design – to influence and promote particular behaviours. In short, when processes are consistent with poor standards of behaviour, then over time poor behaviours are exactly what transpire. We have often – and especially in sales functions – seen the well-intentioned implementation of detailed, prescriptive processes give rise to unintended consequences in the form of diluted accountability and broken trust.
Governance must be explicitly 'aimed' to align with defined (high) standards of behaviour and, in that context, to meet a standard of 'just enough process. Those involved in overseeing its implementation need to work both the process and the behavioural angles in parallel. In practice this is hard, mostly because it raises the bar on feedback, performance management and leadership to ensure that behavioural issues are met with behavioural solutions rather than with the imposition of more process.
By James Bowen and Brian MacNeice are co-founders and Managing Directors of Kotinos Partners Limited, a niche advisory firm working to help CEOs and their teams achieve sustained high performance. They are also co-authors of Powerhouse – Insider accounts into the world’s leading high-performance organizations, published in October 2016 by Kogan Page.