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Public sector Corporate – leadership – II

(This is the SECOND and CONCLUDING article in the series on the above subject).

The qualities of leadership are the same in any given environment. A person can be an officer in the Army commanding a company, a political leader from any constituency, a business executive in any firm or any other variation where a person is in a position to influence the lives and fortunes of not only his subordinates but that of the constituent unit that he is responsible for. Every leadership position is basically a responsibility thrust upon an individual to make or mar the destiny of himself and others depending upon the position and the quantum of responsibility given to the individual. It is then upto the individual to make best use of his individual qualities contributing to providing adequate leadership to the Corporate unit he is responsible for.

Given that we are not talking about the leadership provided by a dacoit to a bunch of thieves, the basic qualities of leadership are honesty and integrity, though there is such a thing as honour among thieves and as Eric Hoffer had said “Charlatanism of some degree is indispensable to effective leadership.” Thereafter depending upon the role envisaged, one can then inculcate intelligence, knowledge, imagination, initiative, courage, etc etc. None of the leadership qualities include business acumen and that is the fundamental difference between selecting an individual for merely an administrative post or as a business leader who must guide and influence his organisation to corporate profits. In the words of Peter Dreucker, “Business has only two functions — marketing and innovation.” This does not preclude the fact that from time to time you do get superb examples from the CSP cadre who have proved to be excellent business leaders other than their known administrative and organisational capabilities.

There are at least three recent cases among serving CSP officers that one can mention as excellent examples of Corporate leadership, all of whom were individually almost sentenced to rigorous hanging for six months for various reasons.

Mr. M. Zafar Iqbal, presently Federal Secretary, Ministry of Production, made the National Development Finance Corporation (NDFC) into one of the finest investment units in Asia with Corporate management par excellence. This finance company, though Government-owned was lauded by foreign experts as an example of fine initiative coupled with imaginative investments that contributed significantly to industrial development in Pakistan. He was later hauled over the coals for supposed financial extravagance, allegations which on investigations were found patently false and without foundation.

Mr. H. N. Akhtar, presently Federal Secretary, Ministry of Communications, can be called the real father of Pakistan Steel Mills. It is during his time that this obsolete monstrosity started to function, to produce for Pakistan’s economy the awesome gap that existed in the economy because of a lack of a credible steel sector. The management was streamlined, export and purchase procedures were modified in a sophisticated manner and a white elephant which was like as an albatross around the neck of Pakistan’s economy was made to lay eggs. The reward for all this corporate excellence was to suffer the indignity of an enquiry and a stint in oblivion. Nothing of any substance was found and the Ministry of Communications is the better for it.

The last of the case-histories is that of Mr. Mohammad Yousaf, present Federal Secretary, Ministry of Religious Affairs. As Chairman TCP he oversaw the revitalisation of exports as a chief mandate for TCP, the theory of which he had propounded as Vice Chairman Export Promotion Bureau for many years. In three short years the TCP was changed into an export-oriented organisation, finding new avenues for non-traditional items never even attempted before. This was a fundamental change from its previous role as a leech on Pakistan’s economy in acting solely as an import house for sensitive commodities. The TCP was re-structured, rejuvenated and had become a functioning commercial house when he was promoted and posted to the next rank. But jealousy and vindictiveness almost got him and he also had to face the indignity of spurious allegations of dubious nature and origin from the FIA and the PM’s Inspection Commission.

These men have been mentioned because each has contributed in his own manner to overturn the basic theory that a bureaucrat is anathema to business. The problem lies in the fact that these men have been exceptions to the rule that square pegs cannot be put into round holes. Each has had brilliant success in the Corporate entity he was entrusted with and in his honest success had aroused the jealousy and ire of lesser mortals in superior positions. Has any move been made to find out the origins of the complaints against them or to isolate the ones who were acting as collaborators/lackeys of their masters in high places in orchestrating these false allegations? The long and short of it is that bureaucrats across a broad spectrum of the public sector are shy to take risks because of good reasons and anyone reluctant to venture cannot be expected to indulge in business risks. One cannot base a complete logic on exceptions to the rule.

After nationalisation, most of our major industries and commercial corporations have been under Government tutelage and the managers have been drawn almost totally from the bureaucracy. For reasons explained earlier this has not been a success and in business lack of success means failure. One of the major reasons has been that very few people can inculcate in themselves the responsibility of handling other’s property as a matter of trust. Ownership indicates a different attitude towards trust while mere supervision is the mea culpa of a business leader selected as a manager. In our religious and social customs, a property of any description is a trust, an AMANAT, to be treasured and protected more than if it is your own, but unfortunately we tend to treat the other’s property without any care, particularly if it is public property, which in the case of public sector enterprises, they are. The individual and collective loot of it is difficult to accept. This has been described at some length in the previous article.

Take for examples an industry which is export oriented. Normally the industry will lean over backwards to promote exports in any manner including wining and dining of potential customers. This will also involve the catering of funds for commissions for agents and consultants, it being understood that part of the money is used by the agent and/or consultant for “business promotion” by direct means i.e. meant to promote goodwill in the individuals among the purchasers/ importers who are decision-makers, quality control managers, financial managers, etc. The meaning of “kickback” in the public sector however is taken to its literal translation, you will rarely become an export agent and/or consultant here unless you cater to return some of the “kickback” money to the manufacturer/exporter who will invent any excuse to keep the agency from you even if you have an excellent record, a 100% “hit” today. This is a ridiculous situation. The advent of a new Corporate head usually means the termination of the services of all the Corporation’s agents at the start of his tenure. His minions will then try and set up “private” arrangements with new firms or even the same agents and/or Consultants that the previous Chairman had appointed. In one recent case the agents and/or consultants having been thoroughly spoiled by the previous Chairman, a man of great honesty and integrity, refused to “kickback” any of the Commission to be earned by them resulting in a stand off, no agents, no commissions paid and NO EXPORTS. To give the devil his due, the man developed the IMPORT side of the business, scandals notwithstanding, and imposed an indirect tax on the people of Pakistan by hiking the amount of commission levied on the imported items. That the import procedure was deliberately flawed to help “favourites” evoked no reaction among any of the so-called investigating agencies.

Most of the investigations conducted by relevant agencies are not productive even though they probably mean well and want to render justice. More often than not the target of the enquiry finds out some “link” to the members of the enquiry team and based on the lobbying effort, dedicated rascals are allowed to go scot free. Does the enquiry team ever stop to think that while the power of life and death of his employment exists in the hands of the subject of enquiry, will any employee give any evidence against his boss? Next comes the clever exploitation of sympathy for an ensuing retirement. The enquiry team rarely touches a person about to retire, this eventually generating a feeling of sympathetic consideration among them resulting in a sanitized enquiry. Obviously they believe in the words of Pablo Casals that “to retire is the beginning of death.” Enquiries must be conducted by a Commercial Ombudsman and businessmen of repute may be included in the tribunal to give professional advice which may be conducive to sound commercial justice based on commercial practices.

The posting of person to Federal Corporations before retirement is counter-productive. These must not be treated as halfway houses to retirement. People of dynamic personality, imagination and initiative, with a vested interest in further advancement should be appointed to such posts. If one tends to treat these Corporations as sinecures before retirement the funds of the Corporations will probably be retired along with the Chairman/Head of the Corporation.

During all this the adverse effect on the morale of the long-term employees of the Corporation is debilitating and has commensurate effect on their efficiency and performance. The poor employees know that these imported chiefs have come for a 3-4 years stint but wield enormous power over their careers and destinies. The employees themselves cannot even hope for these posts whatever their level of efficiency and intelligence because of stupid service rules. Their honesty and integrity are sacrificed at the altar of fear and survival as they become accessories to crime. The more intelligent among them join the gang, their inclination to crime depending upon their conscience, level of honesty and integrity. Frustrated, castigated, without hope of promotion to the exalted Board of Directors, a normally God fearing individual is reduced to an inefficient zombie, harkening only to his master’s voice.

One of the ills that a bureaucrat carries with him into business life is personal likes and dislikes unlike in the business world where all dealing is restricted to “demand” and “supply”. Nobody looks at the other’s ethnic or religious background, his colour, creed and ideology. It does not matter whether you hate the other individual or what he does if he has a product to sell or you have a need to buy (or vice versa), one simply carries out a business transaction. Not so the bureaucrat. He invariably brings to his business world the bureaucrats utter contempt and disdain for the rest of humanity and his treatment of businessmen is similar to the way a Sub-Divisional Magistrate or a Deputy Commissioner will act with his constituents. He will ostracize businessmen that he does not like, thereby effecting the performance of his Corporation. One notable example exists where a Corporation had a claim of US$ 300000 preferred upon it by a foreign buyer who was holding onto the Performance Bond, in foreign exchange in lieu. One of the businessman dealing in this area approached the Corporation and offered to mediate the claim and get it reduced and even waived using his contacts and good offices. This was refused. The businessman thought that the Corporation expected that he would demand money to mediate the claim so, he immediately gave a letter saying he would work “without any cost or obligation” provided the Corporation authorised him to do so. No reply was ever received to this or other similar letters/telexes. In a classic “dog in the manger” philosophy the Corporation parted with over US$200000 (over Rs:3.5 million) in foreign exchange. Would a businessman owning his own firm ever allow this to happen? To the Bureaucrat it was easier to part with Rs:3.5 million in foreign exchange than with his anger at the businessman. After all it was public money and did not belong to his father so it was easy to part with it. Would the Government consider prosecuting? Never, despite the fact that written proof of this exists in the files of the Corporation concerned.

Craig R. Hickman and Michael A. Silva in their book “Creating Excellence” say that “individuals, not organisations, create excellence with their unique skills they lead others along the pathway to excellence.” Further that “the marriage of strategic thinking and corporate culture building requires that leaders not only cultivate broad vision but master the skills to implement that vision. Such leaders see crisis as opportunity, not danger, and create a future equally responsive to the bottom line and to an organisation’s people.” Public sector executives need to inculcate in themselves CREATIVE INSIGHT and SENSITIVITY to build a strong foundation for excellence, VISION and PATIENCE to help integrate the necessary skills while VERSATILITY and FOCUS provide for adaptation. One need not be born with these skills which can be acquired and developed.

The public sector in Pakistan is a vast corporate machine, how many of the leading executives one may ask have been to some form of business school? Corporate leadership par excellence is vital for Pakistan’s economic development. One cannot just send anybody to routine assignment to a business post, it must be well-thought out and conceived. Too many times have we tried to go the route of trying to fit administrative excellence to business requirements, the results have been, with honourable exceptions, disastrous for Pakistan. Federal Ministers who recommend or acquiesce to these appointments to Corporations within their jurisdiction should be held accountable by the PM. They are as much guilty as the culprits and brilliance does not preclude being accessories to deliberate malfeasance. Federal Corporations must not be treated just as sinecures and reward for personal loyalty or as a largesse but as living bodies that can and do significantly and positively contribute to the economy. Public sector corporate leadership needs to be enhanced in quality and that can only happen when merit is drawn from a wide spectrum of talent that is available in Pakistan.

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