Shantanu Rege was recently appointed as MD & CEO at Mahindra Rural Housing Finance. He and Manoj Agrawal had an in-depth conversation about leadership from multiple perspectives. Several interesting incidents and anecdotes take this conversation right to the heart:
Manoj: Steve Jobs has said: “Simple can be harder than complex. You have to work hard to get your thinking clean and make it simple, but it’s worth it. Once you get there, you can move mountains.” This may feel counter-intuitive, but is a very powerful statement. In your own life, how has it been for you to move things from complexity to simplicity? What has been the impact, for yourself, your team, and your customers?
Shantanu Rege: If we are talking about the transition from complexity to simplicity in life then, we need to speak about both – the tangible and the intangible.
Let me start from an experience up close and personal to me. During my business school days, my peers and I thought that we would solve complex problems by say, working at a hedge fund that would involve working with very complex instruments. If not a hedge fund, then perhaps get a role with a consulting firm and work with the brightest minds. This is where complex dynamics are at play subconsciously. Quite often we end up following the herd. If we do not follow them, then we tend to believe that we are not as bright as they are. The same way we think, having an x amount of money will help us to do what we truly want to do.
However, during this time, I realised this is far from the truth. Only creating wealth for myself wasn’t what excited me. With a little soul-searching, it emerged to me that life was more about giving back to other people. All the education and all the money earned was for this. In that sense, a lot of the simplicity lies within – when you get in touch with your core and aren’t just doing stuff to show the world that you have outdone the rest.
From a business perspective, let me tell you that some of the answers to many complex questions are very simple. Many of the answers are already known to the team. For instance, one challenge that we had in the lending business is to know expected customer behavior in the near future. If the customer expects someone to come and collect cash from day one, then he expects that every month somebody will come and collect the cash. So, if we wanted to increase digital payments then, we must empower our customers to either deposit the money at the branch or do a bank transfer or pay by UPI. One of my regional managers suggested that we create a mechanism where we don’t allow people to collect cash at all by preventing them from printing receipts in the field. There was an apprehension initially however, our intent is right and there was a buy-in from the team. Today, we have 4000 people and not one of them has a receipt printer. This was initiated just pre-covid. This was an eye-opener to even Mahindra Finance, our parent company.
It is not an intellectual thing to simplify things. Rather it is a desire to make things better. Another culture that I am very keen to encourage and which I think is beneficial for organizations is ‘innovation.’ How do you incentivize customers, how much discount do give – it is all an experiment. But you need that culture of testing today. If you can create this culture and make people feel comfortable with it, it creates a dynamic organization. It is easy to get into the habit of living by SOPs, which can make processes right. Young people like working in organizations where they feel empowered to bring about some changes.
So simplicity starts from within – that is a good learning. Simon Sinek, a leadership thinker, says: “Gen Z seek a company where they get their purpose in life, the friendship, the community, and the social life. They even expect the company to be place where their politics align with the organization. They want to bring all their problems to work because the family system and the social system is not giving that kind of pillars of support. And the Gen Z seems to very intimidated by confrontation.” My question is: do you see this trend in India, or is India different from the west?
On the first part about purpose is important, I think it’s already there. I am citing my example. I chose to come back to India not for money but for the purpose, of how-to bring meaning to my life. Increasingly, people with good education can get a job anywhere. But people are trying to find a meaning to the job. How does what you do make a difference in somebody else’s life? Which is why organizations that are purpose-driven are sought after.
One of my reasons for joining the Mahindra group is its Rise philosophy. I can link what I do on a daily basis to Rise. I feel that my business and the work I do embodies the three pillars of Rise. Our whole rural housing finance itself business is conceived on the three Rise pillars.
Many people said that rural housing finance doesn’t make sense – it’s too manpower intensive, ticket size is very small, the economics doesn’t work, and there are too many unknowns. Despite these impediments, it was possible to build this business in the Mahindra group. A lot of people who join us come in because they believe in helping others in their villages, in their talukas, and their districts, who otherwise would have gotten the loans at exorbitant rates of interest.
The busiest time for our employees is normally Nov-Dec because that is a time when weddings happen. When you are bringing in a new member into the house, you want the facilities to be there and the home to be better looking, or a new room to be made. Often our frontline salespeople are invited to the wedding. All this is an embodiment of purpose.
We say the workplace is an extension of the family. And like every family, it is very difficult to ensure everything is uniform – there will be differences in views. So, everything which applies to a family will apply to the organization. As the head of the family, the leader must allow people to express their disagreements without being disagreeable.
I want to encourage debate and even disagreement, even at senior levels. I have a mechanism that every Monday the senior leadership team meets,
and we debate all issues which people have relating to work and encourage diverse points of view to ultimately reach a better decision.
I am not quite sure if the latter half of the statement stands true since every individual would have different views and approach whilst handling their personal lives and it would be controversial to generalise this. However, my suggestion to managers is that they need to create a system where confrontations and disagreements can be managed.
So you like bringing the best of home and family features into the workplace. Jeff Bezos says: “A few big successes more than compensate for a large number of small failures.” Does this philosophy work for you? Do you apply in your organization, among your colleagues?
I will go back to the earlier example – that the culture of experimentation is all about this. You celebrate the successes. Some of the successes will be big enough to compensate for many of the other experiments which did not work. And as a leader and a manager, you just need to make sure that nobody is doing an experiment that is betting the company. So how much freedom people have, to do different levels of experiments is the issue. If an experiment is successful, how do you scale it up? If it fails, how do you prevent the same experiment and experiencing the same failure again – these have to be managed.
Do you feel that today there is a need to encourage people across the spectrum to actually be bolder and experiment a little more than what they’re doing?
I think this answer will vary from company to company. At Google, they are certainly doing it. At this point in my company, we certainly want the frontline people to experiment a little more than what they’re doing today. We have tried to create some institutional mechanisms where we have given some problem statements to people who we think have potential and asked them to think out of the box.
We make cross-functional teams and ask them to come back and make a presentation. We also give them small budgets. I think we’ve historically been very regimented. If you follow policy too tightly, your run risks that even you might not know are embedded in the policy. Especially with digitization, now it’s possible to do controlled experiments. In my organization, I certainly want people to experiment a lot more.
Rory Vaden is a best-selling author. He says: “Time management is no longer a logical, it is emotional.” Have you felt at certain times that you were driven too much by logical time, by physical time, rather than by emotional time? How do you tend to respond in a situation where there’s some kind of mismatch between the clock and what you’re feeling?
At senior levels, IQ is just a word. What differentiates great leaders from others is their EQ. For most leaders, their IQ will be above a certain threshold. And the IQ differentiator, unless you are in a very niche business such as pharma, is not going to add the kicker in terms of performance. The real differentiator, therefore, is actually how you deal with people, for which you need a very high degree of EQ.
I feel blessed that I was able to spend 4 years with Mr. Anand Mahindra. One of his traits which I have been reflecting upon is that when he is having a conversation, he will talk only to the concerned person. When I had my first conversation with him which lasted 45 minutes, he had a childlike curiosity about who I was, why I was interested in coming back to India, what I could do at Mahindra, and so on. When a leader asks questions, he is demonstrating his curiosity and makes the other parties feel valued. Not once in those 45 minutes did he look at his watch. I felt I was the centre of the universe for him. That meeting, frankly, made me feel that I could learn so much from him. He is certainly a bright individual, but I think he has enormously high levels of EQ. Whereas IQ will tell you all the things that are important and will want you to multitask and focus on activities that deliver the highest ROI.
EQ pulls you towards personal decisions and working with teams which can be based on return on investment in the future, and in the long term long, by building relationships, demonstrating how you are the leader, how much stress you want to take, etc. These are the things which frankly, no business school will ever teach.
Your meeting with Anand Mahindra felt like a revelation to you. Didn’t Harvard prepare you for something that as a part of the curriculum?
Harvard gives you a lot of exposure to people like this who have been very successful. It tries to make sure that, you know, some of the fundamental building blocks again, mostly in terms of IQ, frameworks, and batchmates across cultures who probably have the same level of IQ are in your classroom. But how much of that can you imbibe?
At the workplace, there are people who may not be senior to you in the hierarchy, but they can teach you and make you reflect on your leadership style. Some of these are EQ led and more important than logic or intellect. I have a senior colleague who is a brilliant performer and tends to demonstrate calm even in the eye of the storm. Whilst interviewing 20 people within for potential elevations within the company, I asked them – Who do you respect and look up to and why? 19 out of 20 people said the same name and respected him because he is so calm, and nothing seems to perturb him. I thought back and realized that there are moments when I am not as composed as I need to be. Hence, this is one leadership trait that I would like to imbibe.
So, if you take decisions not as an individual, but as a collective where all the inputs from stakeholders are taken into consideration, you will be able create a culture where team members feel confident in expressing a dissenting point of view along with the rationale and you can make decision based on all the inputs.
What else have you learnt from Anand Mahindra?
I will tell you another experience with Mr. Anand Mahindra and how it influenced my own leadership style in a big way.
Mahindra has ‘war rooms’ where businesses present their plan to the corporate centres. There is no set format for presenting in a war room. When I was his EA, there was one business that was presenting at the war room, which came in and did not present answers but rather questions – the business said – these are our questions that we are struggling with. As soon as they showed the first slide, everyone in the room turned to Anand to hear what he had to say. But what he did next shocked everyone. He approached the junior-most person in the room and asked him for his views. He went around the room listening to everyone without even an expression to give away whether he agreed or disagreed with their views. Finally, he told the team that it is your business, and we will support you for what is best for your business today. This is a rare skill and that is what building teams is all about. This incident has helped me improve my own EQ.
Do you think in hindsight that Harvard education, or any top-notch education, should give a bigger dose of EQ development? Or was it right at that point of time to focus on IQ, not EQ?
I am not sure on how EQ can be imbibed in a course, unlike functional knowledges such as valuation or accounting. Leadership is not the same. You cannot copy based on style. So, leadership must go along with your style, your authenticity, what way you were brought up, what is important to you and how do you deal with people. It varies a lot. So, the only thing which helps is exposure and Harvard does a good job of that with exposure to people with very diverse backgrounds, different nationalities, and as much diversity as you can find in the world is back in classroom. You come out enriched in terms of at least understanding the different styles, what works, what doesn’t work.
Thank you, Shantanu, for an enlightening conversation. Wish you all the best in furthering your leadership quotient and applying it in all walks of life.
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