Our study shows that the level of trust in leadership is low and I won’t be surprised if that will decline further this year. Rebuilding the trust of employees, customers, and investors is perhaps one of the toughest challenges, and I’m not sure if many companies are willing to put in that effort.

Q: Several companies at this point are tottering. Is it the right time to bring about a change in leadership?
Ans: It depends on the company. There are times when a board backs not a leader but the path the company wants to take. The board needs to come to a conclusion on whether or not that path needs to change dramatically. If the path needs to change, the next question that needs to be asked is, can the same person take us down another path? Leadership must not change simply to show investors you are taking some action. Unfortunately, there are cases where that has happened. You can’t expect someone else to magically come and turn things around.

Q: What are some of the things companies can do in strong times to ride out the tough times?
Ans: First of all, they should have a strong balance sheet. The stronger your balance sheet, the more likely you’ll be able to survive a prolonged downturn. Two, they can put together a management team that can fight a crisis. Usually, when a crisis hits, there are two types of reaction we witness: The first is denial and the other is a complete paralysis where companies don’t know what to do. Thus, it’s important for companies to build management teams with people who are ready to take on this kind of crises and that requires the ability to work in teams very aggressively. In short, it comes down to two things — money and people.

Q: On a different note, are there cases where heads of companies tend to put their careers and interests first?
Ans: [Laughs] I don’t want to generalise on that. In the media, you tend to hear of people who are exceptionally good or exceptionally bad. What I see is a lot of the middle ground. I think there are very good individuals out there who are running really good companies with integrity. These people do not put their career first and look to balance their own aspirations with those of the firm’s. That is the predominant reality for me. Unfortunately, in those cases where people put their own needs first, it just creates a perception that it is the done thing.

Source: Business Standard