How a CEO learnt to be fair to his employees when handling tricky leadership situations

In corporate life, the journey of growth increasingly involves understanding that people must be valued over machines, finance and processes. Yes, machines, finance and processes are critical for success but they are finally managed by people. How you inspire people, facilitate their growth, and set examples are crucial for success.

One of the difficult aspects of leadership is asking an employee to leave the organisation due to nonperformance or ethical issues. You tend to hesitate and avoid confrontation and direct communication. You are caught in a dilemma between the person and the organisation. The consequences of no action are bad for both the organisation and the person.

Let me share two instances from my working life at different stages of my spiritual journey that reflect the changes I was experiencing.

There was a non-performing sales leader, and there was pressure on me to take corrective action. After a long postponement and building huge internal stress, I called the person to come and meet me. The meeting was short, with no preamble; I just asked him to leave. I do not recall anything else from that meeting other than his tears. I did not see him again, and I still regret how I handled the situation. There should have been much more thought, preparation and counselling. I was not just terminating a work relationship but impacting a human life and his close networks. The way I acted resulted from being task-driven and not showing enough empathy. It did not make him or me feel good.

Much later, I again faced the underperformance of a very senior leader. The business was going adrift, and there was talk in the senior management that we needed to exit the manager. The easiest thing would have been to tell him things were not working out and terminate him. However, this time, I began digging in to understand the background. Interestingly, the person had been parachuted into the role to stop the financial bleeding in the business, which meant he had a strong performance record backing him.

He had put controls in place and had managed to steady the business. The organisation was now seeking growth; obviously, this person did not have the experience for this new phase. Nor had we trained him for it, so we were equally culpable. What message would we send out by terminating his employment? At one end, we had a person who had performed reasonably well but was now struggling, and at the other end, the team was struggling because the business was not growing, and the bottleneck was at the top. It was a turbulent time for me, trying to think of the right action.

I was reading a book on leadership, in which HH the Dalai Lama is quoted saying that an action, however difficult on an individual, when it is good for the larger community, is okay. That confirmed we had to exit the person and set the right performance benchmark. Yet we had to be considerate of what he had delivered and the commitment he had displayed through the turbulence.

Leadership was pushing for termination, which I resisted. We relocated the manager to another location and in a role where his strength was relevant. He regained confidence. The message was ultimately clear and impactful: we cannot tolerate non-performance, but we will treat each individual fairly.

In the first situation, I could not look the person in the eye again. In the second case, we remained collaborative colleagues. You have to do right by people. They are the core of a business.

Putting people first does not mean only being a support during times of crisis. It is about enabling them to grow, listening to them, and making them believe they matter.

During my first year at Tata Coffee, I met 250 managers in small groups of ten, cutting across hierarchy and functions. The purpose was to listen to them and seek thoughts for growth opportunities and the key irritants they faced in their work. It was clear that these meetings were a listening post and not a guarantee that everything would be acted upon. This clarity set the ground rules. The meetings provided a wealth of information for us to build an agenda.

The bigger win was the feedback from managers that they felt heard by the top decision-makers.

There was another time when I met with a few women employees and asked them how we can improve their work lives. This led to two policy changes: supporting a creche where children could be looked after during work hours, and allowing a young mother to travel with her baby and a caregiver for short business trips. The financial outlay was minimal, while the positive heft was big.

I mention these to underline the importance of listening and of genuinely caring for everyone in the organisation. Employees can see what is genuine and what is being done for effect. The former builds trust, while the latter destroys it.

I learned the importance of dealing with people in this manner very early in my working life, though it took me many years to embrace it deeply. In one of the assignments after my tumultuous introduction to corporate life, the head of the region opened their home for me to stay in. It made me feel like I belonged and trusted. It made me conscious of living up to performance expectations and not letting down the trust bestowed on me.

Subsequently, during my assessment, he made a comment that has stayed with me: “Your knowledge is far greater in verbal discussions than in your written submissions.” In one sentence he had endorsed my ability and also pointed out the area that needed development. He had made an effort to understand me.

After all these decades, he is still the person who I revere, and it was his humaneness that left a deep impact.

Excerpted with permission from The Other Side of the Mountain: A CEO’s Journey Through Spirituality, Sanjiv Sarin, Speaking Tiger Books.