1|Page Strategic leadership date: 21/03/20

Learning journal 03
Subject : Strategic leadership

Case : Mangalore Chemicals and Fertilizers. (A)

First learning is that if any decision we have to take:

Take time for data collection take a pause then say.

There is difference in ordinary talk, asking questions and MBA talk.

It means questions must be realistic and relevant to problem unlike in ordinary talk.

As in this case as DP Mehta wife should ask questions like these:

 Do you have team at top? With which people you are going to work?
 Do you have money to run plant? If not from where you will going to arrange?
 What about suppliers and labors status?

Risk/suicide: We learnt about difference between risk and suicide.

Risk is something we are calculating in hope to get some outcome unlike in suicide.

What is a criterion of capability?

It is based on how many options we are in hand and will get intended success if we are capable.

If we are not capable then unintended consequences and grief comes.

BIFR Company: having net negative worth, liability more than company assets.

Job of manger: doing/saying things what is sure, not with “if” or “but”.

Every risk is not a loss only. It is also an opportunity to prove worthiness to company.

Credibility vs. performance:

Both are directly proportional. As performance increases, credibility also improves.

But in hostile situation as performance deteriorating, credibility also decreases a lot and so
stakeholders become more hostile.

In life we have always two things to decide whatever the situation is:

1. What we need in our personal life?

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2. And what we need in our professional life?

Based on these two we have to take decision.

“No money is free money”

Till now I thought that equity is our money it doesn’t carry cost but now I understand that it
also carry cost of not getting bank interest as opportunity cost.

So RoC (return on capital) is much more important than RoE (return on equity).

Concept of creative account:

This is illegal and unethical to do that and if there are multiple created accounts in a company it
means something is seriously wrong happening in company. In sick Company we get plenty of
receivable in balance sheet.

“Strong leader also may wrong”

That’s where board of director role comes in play and they must raise questions if something
wrong is happening in leader decision making.

Turnaround strategy:

Hiring strategy: hire retired people with good health. Since they have high level competency
and have moderate inspirations.

Production strategy: either it is (situation based):

 Margin/contribution based production(high profit based)

 Cash based (low margin/profit)

It is purely based on our need of organization in present situation. If we need cash instantly
then produce product which are able to generate cash instantly, although may be its
contribution is low or negative. After normalization of operation and organization goal then we
may switch to high margin product production.

Concept of forced creativity:

Creativity is good for everyone and it is also need based but may not due to some definite
problem.

But In forced creativity we always focus on a specific genuine problem and how to solve this
problem.
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The two conditions for forced creativity are:

1. Understanding and knowing problem fully.

2. We must believe that there is/are solution/s for this particular well defined problem.

Single loop learning:

We know this is the theory and then we proceed further based on this theory. More learning
narrow our thought become; thinking confined within framework/theories/concept we learnt.

It is lesser chance of out of the box idea like things.

Double loop theory:

We challenge the existing theory itself. Then we proceed further to identify its solution. Less
learning more open to diverse solutions.

Type of managers:

 Strategic Managers: different solutions for different problems.

 Swami Managers: whatever is the problem, same solution for all.

Transformation of organization Control to commitment is a journey. It is journey towards

excellence.

Three steps in turnaround strategy:

1. Surgery: organization restructuring.

2. Recovery: providing healing like services/changes.
3. Strategic rehabitation: strategic orientation of company.

Stronger leader, more governance need in organization.

Change in leadership:

 It means either change top leader mind set.

 Or change leader if existing one reluctant to change.
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