Alfred Ramosedi, FCMA, CGMA, the CEO of Bayport Financial Services, and CIMA President Amal Ratnayake, FCMA, CGMA, discuss what makes an effective leader in this FM podcast. Their conversation includes how leaders can get “buy-in” from their employees by communicating the need for change and how in the digital era companies and their leaders need to move fast to stay ahead of the competition.
What you’ll learn from this episode:
- What makes an effective leader in the digital environment.
- Why leaders sometimes need to act with imperfect information.
- How to get “buy-in” from employees when leading change.
- Why leaders need the skill to say “no.”
- The importance of creating psychological safety for employees.
Play the episode below or read the edited transcript:
To comment on this podcast or to suggest an idea for another podcast, contact Oliver Rowe, an FM magazine senior editor, at Oliver.Rowe@aicpa-cima.com.
Oliver Rowe: Welcome, Alfred, and welcome, Amal.
Alfred Ramosedi: Thank you, Oliver.
Amal Ratnayake: Thank you for having us, Oliver.
Rowe: Leadership and leadership styles are frequently talked about. What are your own definitions of good leadership. Alfred?
Ramosedi: Thank you, Oliver, for introducing such an important topic. This topic is very, very relevant at the moment, because our global stage is undergoing a lot of change. There are many, many issues that are presenting pressure on the global growth in terms of economy, and the impact on the people is huge. So, my own definition of a leader is a couple of issues that I've been thinking about, that I've also been practising, particularly from a South African and African perspective, because the change here has been a lot more felt, in terms of economy.
So, a leader is someone who helps the people to navigate through the change, so that they don't feel threatened. As a leader, you are supposed to be someone who actually understands where the change comes from, its impact on people, and spending a little bit of time in making sense of what change means to the people that you are leading, for the organisation as it changes, so that you can craft the picture for the people in the future. As a leader, you have to be thinking about ten steps ahead, ten years ahead of you. In fact, probably for some businesses, a little bit longer than ten years, because it takes probably about five years for you to be able to implement some of the changes that you are implementing.
So, you need to be seen as someone who understands where your business is going, and being able to sell that vision and that picture of that company about ten years ahead. So you have to be a very strong visionary person that can paint a picture for the future. What I've found is that people do not expect you to know or control that future, but you need to be able to show them what the possibilities look like in the future. And you also need to balance it to the present, in other words, “As a person where I am, where do I fit in, in the future? What is it that I need to do to co-create the future or to be part of that future ten years ahead?”
Rowe: Thank you. And Amal, how do you define effective leadership?
Ratnayake: I fully agree with Alfred, but I also think that leadership is about inspiring people. Inspiring people to go that extra mile, inspiring people to look outside the box, inspiring people to reimagine their roles and how it can be done differently. And I think it's also about dealing with ambiguity. In today's world, sometimes you've got to take action without having perfect information. Sometimes, it's more important to make a decision and move forward with the information that you have at hand, rather than waiting to have perfect information. So it's about dealing with that ambiguity.
But I think leadership is also about supporting people, and lifting people up, and taking them on your journey. And it's about developing that next generation of leaders.
Rowe: And in today's digital environment, what does leadership mean?
Ramosedi: Oliver, that is a very, very important thing that we have to deal with, because we have to accept that the digital environment is here to stay. And the rate at which the digital environment encroaches on the old is something that is here to stay. I'm seeing, day in, day out, as the chief executive of one of the financial services industries, I'm seeing, day in, day out, how the things that we used to do in the past without using a digital or technology in the past, people are expecting us to do them. So, change is a constant; it has been constant for quite a while. And we have seen that companies that do not change, people that do not change, circumstances that do not change will lead you to be in a very difficult environment where you are not able to compete with other people that have taken advantage of that.
So, what we have seen in our environment is that, in a digital environment, the cycle of change has become shorter and shorter and shorter. About 15 years ago, people used to ask you for your fax number, because the prevalent way to communicate with somebody instantly was through a fax machine. These days, when I get business cards from other people, when I exchange numbers with people that are in different industries, or when we meet at conferences or at meetings, people don't ask me for fax machine numbers, normally, anymore. They don't ask me for fax numbers, anymore. They are asking me for a mobile phone.
And what I've noticed is that, once I've given them that mobile number, before I even leave the room, they've already sent me a message. Whereas, about 15 years ago, when I gave them the fax machine number, they would actually send me a fax. Probably, after 15 years, that's been carefully thought through with a proper business case on what needs to happen. Whereas, today, it's now taken us a very quick time to think about the response time to a person that you talk to, that you communicate to. So what is very important, as a leader, is that you need to be able to have the ability to explain to people why change needs to take place very quickly, in a shorter and shorter time.
Why the time between starting something and implementing it has to be shortened, because people expect that, competitors expect that you will be competing with them in a very shortened time space. And clients are also expecting that, from time to order to time to delivery, it becomes shorter and shorter. Or your response time to telling them about what's happening has to be shorter and shorter. Now, what I've noticed is that people are scared of this change, and I think they need not be. Because the majority of the business changes are due to people's actions.
In other words, you can actually be part and parcel of that change, because the people that are impacting digital are people. Digital didn't just fall from the sky; it's actually us, as people, through our own actions and through our own demands, that want these changes that are coming through from the business. We are actually the ones who would want good service, and we have seen that, through digital implementation, good service can be implemented. So as a result, as consumers, as people, we consume business change, so we start this thing, and we do have an influence in this particular change.
We also need to embrace change. What I've seen in most environments is that, when you embrace change and you become part and parcel of it, you can actually give a direction as to where the company goes with this particular change. And when you can give direction and give input as to where the company can go with this particular change, you become part of it. You can actually provide alternatives, and you can own what needs to happen. Whereas, when you fight the change, it becomes a problem, because then your role becomes less and less important in that, because people do not see where you fit in with this particular change. You are seen as a competitor to the change, or you're seen as not part of where the company should go and how we should grow.
Whereas, if you embrace it, you can win in the environment, and you can grow the organisation, and people can see you as part of it. And what's most important, you can actually provide more alternatives that can enrich what the outcomes should be of that particular change. I think the most important thing, Oliver, that people need to realise about digital environment is that digital is not something that's foreign. We as people started it. Someone started to think about that idea, and that very person started the idea, it cascaded and other people took it upon themselves. The only difference with digital is that everybody can contribute. Whereas, the old way of change used to be bespoke to a company. Whereas, today, if you're thinking about doing something online, you can start it in South Africa, enhance it in Kenya, and finish it off and make it more spectacular by doing something in India. And particularly when you deliver it in England, it becomes very, very simple to also add to it. So it becomes more of an open change, with people adding more and more to it. And if you can think about how you can embrace that, you can actually be at the forefront of adding more and more to it. Whereas, if you fight it, it becomes difficult to see how you can contribute, and it becomes very, very difficult for people to see you as part of it, and everybody loses, loses in the end.
But the most important thing that I've seen with most people is a very, very simple thing, Oliver and Amal, and this thing is that people do not know how to prioritise coming out of strategy what to implement. And the general cliché and advice that I've given to people is that maximum of ten big plans per business unit. Anything more than that becomes difficult. It becomes difficult for you to be able to prioritise in terms of what IT resources, information technology resources, you allocate to that, marketing resources you allocate to that, compliance resources you allocate to that, process unit resources that you allocate to that. Also, it becomes very, very difficult when you have to manage conflicts between what you need to do in one department to the other, and prioritising between the business units.
So, maximum of ten big plans per business unit, and also know what not to do, and decide very quickly what you are not going to do. Because other people don't know when to say no. They say the biggest, biggest skill that you can bring to bear as a leader is to be able to say no to your people. If you have a laundry list of actions, you will fail, trust me. Because you're going to try everything else, and you will end up being mediocre on most of all those things. So, being able to say no is going to be one of the most important things.
Also, once you've decided what action it is, decide what success means. How are you going to be successful? The only way you can be able to decide what success means on those ten big plans that you've decided per business unit is by implementing key performance indicators next to each one of the ten big plans. So, you must be disciplined to say, "I've got this strategy, it's going to degenerate into action, here are my ten big plans." Be very quick, next to each one, before you even implement them, say, "I know that I'm going to implement this within such a timeframe, and my success against each one looks like this because I'm clear about my key performance indicators against each one."
Rowe: Thank you, Alfred. And, Amal, how do you see leadership in the digital world?
Ratnayake: I'd like to pick up on one of the points that Alfred was talking about. And Alfred spoke about needing to react urgently, needing to react quickly, and I think that's really important. I think in this digital era, we need to have an entrepreneurial mindset. We need to act fast. We need to be able to act with imperfect information. And I'd like to, you know, there's a Winston Churchill saying that I like very much, and that is that “Perfection is the enemy of progress.” And I think that's very true.
In this era, acting fast is really important, acting with a sense of urgency is really important. So, that entrepreneurial mindset, I think, is going to be really important in this digital era. But I think the digital era also gives us an opportunity to use technology to reimagine what we do, reimagine how we deliver services, reimagine how we interact with our customer base. And Jeff Bezos, of Amazon, said something to the effect of, “Yesterday's wow quickly becomes tomorrow's ordinary.” And I think that's absolutely true, because if you come up with something today and we do not continue to innovate, then our competition is going to catch up with us really fast, and what we have done becomes ordinary.
If I take my company, the Official Community Corporation, as an example, for instance, we're a media entertainment company that's powered by technology. And because we are powered by technology, we are always updating how we do things. Because as technology changes, we can use advantage of technology, to reach out to our customers in different ways. And some of it is evolutionary, where we evolve as a technology evolves, but then some of it is also revolutionary. Because the changes in technology allow us the opportunity to reimagine how we interact with our customer base, how we offer our services to our customers. And that gives us the opportunity to do things in quite a different way, think outside the box and do it in a different way that can delight our customers.
Rowe: And how do leaders get buy-in from their people in the organisation?
Ramosedi: What an excellent question, Oliver. You know, Amal said something now about reimagine and reinvent, and gave an example of the company that he works on and the kind of things that are happening, and how they are responding to the consumers. I need to reiterate that, as companies, we exist because people consume our services or products. So, without that, we don't exist. So we always have to think about what the consumer is doing, is changing, and how he is consuming his products, how he is changing, how he is growing, and what he is looking for, to think about how we change.
So, always reimagining and reinventing just because the consumer needs it. And because if we don't change to meet the consumer needs, we don't exist in our sense. So, the buy-in that I always, whenever I talk to people, I think about two things. I always say to people, change happens because the consumer demands it. That's a big sense, because otherwise, you will wake up one day and people do not want your products and the services that you provide, and you will be having less and less to sell to those people. The second one that I've found prevalent in our country, and probably other people will relate to this, is the legislation requirements or the compliance requirements that are being imposed on companies particularly because we want to protect the consumers that we serve.
So, those two things become the big catalyst to also making sure that we re-imagine and re-invent ourselves. And there are two things that come to my mind in terms of actually getting buy-in from people. The first one is creating a burning platform for people. A burning platform, normally, comes especially if the needs and the patterns of the consumers are changing and that has a big impact on your business. So, we have to think very, very carefully around creating a big burning platform, because you've gotta be careful that you go in slowly and you're thinking that things are going to change, hoping that things will become better. But at the moment when you look at your business, you find that things are beginning to be a problem.
So, as a leader, you need to be able to create a burning platform, and tell people that if we don't move from this platform, we are going to burn. If we don't fix this platform, we are going to burn. And the reason for burning is because the consumer changes are happening so fast, and people are not consuming or taking our products, or they're looking for alternative things. If we don't respond now, you won't be able to survive in the next few months.
The second one is being able to make a business case. Now, a lot of people, when we talk business case, they're only thinking about the monetary sense or the dollar sense, but it's also about creating the need for change. How easy it will be for you to do your work, how much more you can do in your work if we change this, how we can take the mundane processes that are wasting your time, if we change this thing. So, change in the business case that we're talking about here is not necessarily in a dollar sense but also for people to be able to embrace the future because it's a better future. There's a better alternative, there's a better future where people can do more, can add more. And sometimes what I've seen, these days, is that if we can paint into people's heads or minds that, in future, they can have a better lifestyle and, yes, deliver similar or better results than today, that's also part of that business case, that you're putting together for people.
Ratnayake: I fully agree with you, Alfred. I think it's really important for us to help our people understand what's in it for them. Goal congruency, I think, is really, really important. And I think you touched on many of those aspects. You also spoke about helping them understand that they’re an opportunity to learn new things. Because I think in this new era, in our digital era, it's absolutely important that we broaden our skillsets. Because jobs, with the constant change that is taking place, jobs are going to change, our roles are going to change, how we do things are going to change.
And those changes will require different skillsets, it'll require agility. And so, developing these new skills are going to be vital for our people, because that's what's going to help them thrive in the future. And those skills could be the digital skills that are absolutely going to be essential in this era, the technological skills. But it's also the human intelligence skills, skills of creativity, skills of innovation, leadership, motivating people, those are all going to be pretty critical skills that people need to have to thrive in this digital age. So, I think helping people understand what's in it for them, and how that's going to help them in their future, in their careers, I think, is going to be key.
Rowe: Thank you, Amal. And there are many leadership quotes – and Amal, what’s your top quote?
Ratnayake: Well, Oliver, last fall, I attended the CGMA Africa Conference in Cape Town, and Greg Solomon, CEO of McDonald's South Africa, spoke on leadership, at that conference. And his presentation struck a chord with me. And during his presentation, he used a quote that I like very much, and it was a Nelson Mandela quote. And what he said was, what Nelson Mandela said was: "The greatest glory in living lies not in never falling but in rising every time that we fall." And I love that quote, and I think it's really, really true in today's business. It is about falling fast, sometimes, and great leaders give their people the space and psychological safety to try things out, and if need be, to fail.
And what matters is not that you fail, but how you learn from that experience, and how you rise up from that experience, and how you improve the way that you do things, based upon that experience. So, sometimes failing is not necessarily failure. It's an opportunity to learn new things.
Rowe: Thank you, Amal, and thank you, Alfred, thank you both for your very valuable insights, today.
Ramosedi: Oliver, thank you so much. I enjoyed sharing my insights, and I also learned a lot from what Amal has been saying. Thank you for organising this session.
Ratnayake: Thank you, Oliver. And likewise, Alfred, it was really, really enjoyable speaking together with you today. And, Oliver, thank you for inviting us and asking us to join you.