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Can the Board afford to have a myopic focus on a single variable?

Source | LinkedIn | Kinjl Choudhary | Senior Vice President Human Resources at Paytm

The Board of any organization has the responsibility of looking at the long- term viability of an organization. It cannot be merely fixated by the near- term profit motive. While profit in the short- term is a necessary, it cannot be the only criterion by which the Board can judge the success of the organization. In fact, the complexity of the responsibility for the Board lies in the fact that it has to juggle multiple variables on which it has to focus on. It is a fairly simple task to focus on only one variable but then if it were so simple, then one may not need all the experience and wisdom of a Board members to steer an organization. Yet, there are instances when an otherwise mature and erudite Board of Directors get myopic with one variable at the cost of overlooking the others and consequently end up jeopardizing the long- term viability of the Organization by its own acts of omission. While profits may be crucial life line of an organization, but so is market share, so is customer satisfaction, so is talent attraction & retention, so is capability building for the future. The challenge is that some of them may be quantifiable in dollar value and some may not be; some may have an immediate impact and others may have a longer gestation period but in neither case does it justify to neglect one only because they do not have an immediate impact or they cannot be measured in dollar value.

Leadership is the art of balancing multiple variables at the same time when some of them may have contra effects on each other. The point is not to deny the contra- impact of some of the variables but to recognize the same. Leadership, at the end of the day, of all about balancing on the one hand, and making choices on the other. It is the balance between the long- term and short- term on one side and the balance between priorities which are quantifiable with those that may not be so. Organizations that are built to last* or those that go from becoming good to great*, are able to do so much better than the others (*Jim Collins from the books by the same names). If doing these in the real world were as easy as writing them on a piece of paper or talking about the same in a lecture hall, leadership would not have been such a complex and difficult subject to practice.

This inability to balance the long- term with the short –term or those metrics which could be quantified with those which could not be, led to the downfall of an organization which was otherwise doing well for a number of years. 

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