Up close and personal with Rahul Agarwal, the “people-first” CEO and MD of Lenovo India
Rahul Agarwal, CEO and MD of Lenovo India, in a candid conversation with YourStory speaks on leadership, success, challenges, and more.
Rahul Agarwal completes three years as CEO and MD of Lenovo India this year. During his tenure the company has arguably grown and seen unprecedented success in the competitive market. Under his leadership, with a strong focus on profitability last year (Apr 2016-Mar 2017), the company is all set to overachieve its top-line and bottom-line targets.
But it’s not as much about the business, as it is about people for Rahul. One can sense a clear ‘people-first’ approach in his leadership style.
Rahul joined Lenovo India as Chief Marketing Officer in 2005, and with the acquisition of the IBM PC business, Rahul has now spent a considerable and important tenure in the company.
In a candid conversation with YourStory, Rahul opened up about some of his tough decisions, challenges, success, inspiration, and what it takes to stay sane amidst all the craziness.
Here are some excerpts from the interview:
YourStory: What is your most fulfilling achievement in the last 30 months as CEO?
Rahul Agarwal: It's difficult to bring out what the external world would call breakthrough achievements. We've lived in an industry which isn't growing but which is extremely competitive. Just to stay on ground where you are, takes a lot of effort. This industry is known to have a wafer thin margin. You can do a good top-line sometimes, but to do a good bottom line has always been a big challenge. Last year's bottom-line performance makes me feel good. We took some tough calls and overachieved on our bottom-line targets.
In my role, my responsibility is to have a workforce that is happy. You can't take away the pressure and the stress but you can make their life more meaningful. It's culture that you set.
Personally, my biggest achievement is that we've been able to change the culture a little bit. The culture of less meetings, more trus,, less reviews, and respect for each other's time. We’re building the culture of disagreeing with the manager. That includes me too; we take regular feedback from each other. We all have Johari Windows. We've anonymous surveys followed by open feedback. We make them (employees) open up. They are hesitant in the beginning, of course.
I feel that the most important job I've is to set the right culture. According to me, good culture is an open and fearless culture where people don't feel threatened and can speak their mind and tell their managers, 'look, this wasn't a great idea' and the managers have the appetites to absorb that feedback. And also the culture where ideas are generated.
YS: What’s your biggest challenge?
RA: The biggest challenge internally is to always keep the team up and running despite being under pressure all the time. We work in a very intense organisation. I've spent more than 16 years here but I still don't see a day when I feel I'm settled. The era of career organisation is over. You got to be relevant, contributing, and seen as the worker of the future. How do we keep the whole team motivated in that world? We work in a heavily leveraged model which means that even when I clock a billion dollars in revenue, I'll have only 300-350 people in my team. Then how do you manage resources and ensure that people have a good work-life balance? In all this madness, how do you still keep the customer at the heart which is something this industry is new to?
YS: What is the role of culture in success?
RA: In any industry if you look at the top three companies, there won't be a big difference in their products, pricing, brand perception, distribution structure (car, shirt, shoe, computer); so the invisible thing which makes the difference is how your employees are engaged which in turn will depend on how much they enjoy working. Twenty percent of the people will always be on the brink and will leave you. But it's how you leverage the balance 80 percent and within that, and learn how to create a loyal set of 30-40 percent who will really hold the baton and take the organisation forward.
YS: What excites you?
RA: I guess it has become my habit here. Almost 80 percent of my career has been (at) Lenovo. I think (it’s) the challenge, and the uncertainty (which excites me). What gives me satisfaction is the way I manage the team because that's the most difficult part.
People look forward to doing roles like mine but the toughest job is to manage a bunch of senior people especially when they were your peers earlier. People have huge egos, they have their own leadership style, they have become rigid and too sure of themselves. The more senior you are, the bigger is your Johari Window.
You do 19 good things, but once if you get a little excited and lose your temper and say something in public, they'll remember it for months and months. So, it's difficult to be a good leader. You want a certain degree of democracy but you also want a certain degree of pace and direction. So how to strike that balance? I find that very interesting.
I still feel I'm learning. I read a lot of books on leadership and how to manage people. I realised that till I took up this role, I wasn't really challenged. I still don't call myself a great leader. I'm okay with strategising and execution but people management, how to bring the best in people - is still unfinished in my agenda.
On the whole, I think I feel loyal towards Lenovo and may be that's what brings me here. The uncertainty of the report card is like the time you were in school. When I used to be in a marketing role, it was very comfortable because there was no strict report card. But now when you are doing a P&L role, your report card comes out every month. Whatever level it is, somebody is your boss.
The opportunity of being able to influence the culture and people's lives, excites me. I really go deep if I get feedback that some leader/manager is being a little dictatorial or they are asking people to work on weekends. I like this part and I can play a role there.
YS: What are some of the good, bad and ugly decisions you have taken?
RA: The ugly decision has been in the past when I was harsh on people. I've been impatient and I've let that come out. The good decisions (include) some of the hiring that I've done. Sometimes, there are people who have been under pressure, I've protected them and they have turned around.
From a business point of view, we've taken many good decisions - whether it was going heavy on online or focusing and improving our after-sales service or creating a campaign for the smaller states or improving the profitability of our enterprise business. At any point in time, the hit ratio cannot be very high.
Business-wise, bad decisions (include) some of the people decisions that have backfired. The hiring has not worked out. Sometimes I feel I'm not hard enough on people when I should have been. It works both ways - sometimes you're too harsh and sometimes you're too soft. It's an art to find the right balance which one has to learn on his/her own.
To be honest, it's not the big decisions that have gone wrong. It's just how you do things that you feel in retrospect you could have done a little differently. For example, we've been calling out customer centricity as our big buzzword for quite some time but I still feel that we've not done enough on it. Sometimes we've gone too deep to just pick up a deal in the past, so you feel bad about it.
YS: What are the qualities of a good CEO?
RA: A good leader is someone who is able to get the right balance between SOP – Strategy, Operations and People.
- Strategy – It’s the ability to create a vision, and long-term plans which are very good, executable, realistic, and trackable plans.
- Execution – It’s where many people fail because when they become CEOs they feel they shouldn't be tracking so much - ability to set up processes, detailed metrics, reports, meetings at the right level and hold people accountable. Are we taking a contact check on whether we're moving forward or not?
- People – It’s the ability to hire the right people. The CEO should get involved in the recruitment process because if you're not hiring the right people then what is it that you are doing? I get involved in the hiring process - how many interviews, reference checks, and still we make mistakes.
The ability to hire the right people and make sure that there is the right structure in the organisation is important. A wrong structure can paralyse the process. (You need the right leaders, right leadership, right training, and how to motivate/drive people at different levels. A good CEO is someone who can do these three things. Out of these, execution is something most people are good at. But to build somebody's strategic acumen is very difficult.
YS: What are the qualities that help you in your current role?
RA: Self-awareness. I'm self-critical and I don't want to be too sure of myself. That's very important, because in this role, people take you too seriously. I've seen how people respond to what I say in meetings is so different now than what it used to be. It's the self-awareness that keeps me grounded. Taking feedback from team members requires courage because people can say anything and they say nasty things. And when people say things, a part of you will not agree to some feedback. Sometimes you know that the other person has misinterpreted what you said but you need to have the courage. That's a softer element that this role requires.
This job stretches you because the pressure from the APAC is very high, (in addition to) the chaos and complexity of the Indian market (B2B, SMB, consumers, exclusive retail, LFR, multi brand retail, e-commerce). It's a very complex role and somewhere I feel I'm able to handle complexity and simplify it.
I make a lot of efforts to not come across as too busy. So, I need to be able to explain and summarise things in a quick way. I think I do this balancing of SOP very well. I'm a big fan of time management and I actually analyse my time. Every three months, my secretary (executive assistant) and I sit down and see how much time have I spent on strategy, operations and people, customer meetings, partner meetings, and on email and emergency situations. We always have targets. People cannot work more than 50-55 hours in a week, so how do make the best use of that?
I think people who work 70 hours a week aren't on top of their work. I've a natural instinct for time management.
YS How do you maintain work-life balance?
RA: Work-life balance is in the mind. Do you stop thinking about your family in office? No. Similarly, you can't stop thinking about your work when you are at home or with family. People tend to be very fussy about it, they want it to be a one way street - at home I shouldn't think about work whereas at work it's okay to think about home. We all know that most people do something or the other (what can be classified as home-work) in office. It's all in the mind. So, if you've a good life, i.e., if you like your life at home and office, then you'll have the work-life balance.
The number of hours you put in do matter. If you are coming to office at 9 (am) and leaving at 9 (pm), then there's something wrong, because that's not how we've decided life should be. We've thought life should be 9 to 6 or 9 to 7, five days a week which means that in 50 hours you should be able to do the job. The remaining 118 hours are for you. Of course you get only 30-40 hours once you've for accounted sleep and commute. So, time does matter but it's more in the mind.
I've been in roles where I've worked very hard, especially when I was setting the world wide hub. We set up a global hub in Bengaluru and we were marketing for 60 countries for Lenovo - creating TV ads for Australia, radio ads for Germany, digital ads for US - it was a very complex job and nobody had ever done it before. CK Prahlad also mentioned that this was truly innovative stuff. Then I was working 16 hours a day but I was happy because I was doing something which was visionary and my family was very supportive. But today, if on a regular job I've to work for 16 hours, I would be very unhappy. So, it's more about the balance and if you like the culture of the company that you work for.
YS: What defines success for you?
RA: There is inward-looking success and then there's outward-looking success. This year IIM chose me among outstanding alumni performers and I was laughing when I got it because very few people get it and many of my batchmates have done exceedingly well in their careers (those who didn’t get it). So, how the external world chooses success is sometimes not very clear.
Internally there are some things to tick off. Especially for people who grew up in a middle class family - certain financial benchmarks, certain designations and a certain growth path. I've done more of the tick marks but I think I've done these more because I was lucky rather than because I've done something dramatically different. So, I don't feel that success.
Overall there are few pivots to your life which define success:
- Professional success - that you can put a dimension to.
- Personal success - it's about your family - is your family happy with you, your body - are you giving enough time, some kind of discipline?
- Time to yourself - beyond fitness, how much time do you spend with your friends and give to your own pursuits?
- Self actualisation has infinite levels, so that keeps changing based on what you achieve.
Note – This is the first part of our conversation with Rahul Agarwal, CEO and MD of Lenovo India. Stay tuned for the second part that will focus on Lenovo India’s performance, challenges, and plans ahead.