Given the present challenges that have arisen due to the COVID-19 pandemic when we find economies struggling to find a firm foundation, stock markets becoming increasingly volatile, and credit becoming tighter, we find many businesses, even established corporations struggling to maintain their growth and profitability quotients.
This brings into sharp focus the role of the business or organisational leader – the person who can steer the ship through unchartered waters, keep up morale and pursue success.
What is often read, discussed, and debated in the world of economics and corporate business is an ideal to which a leader must conform. On the other hand, there is the practical aspect of running and maintaining a business with defined financial goals and contributions to the national economy.
Any discussion about leadership economics must lie in between these two ends of the spectrum. Let us take a look at how leadership economics adds value, and understand from the most successful entrepreneurs of India the management of organisation growth amidst uncertain times.
Power of leadership economics
To understand the real power of leadership economics, we must look at individual sectors and at the players in each of them. The revelations of such sectoral analysis may be quite startling. Each sector may involve at least 6 companies, businesses, or brands of note.
There are also a number of smaller enterprises but the top 2 or 3 players very often capture about 70% of the total market share. Their profitability margins also far exceed the smaller businesses in the industry by a considerable margin. Much of this success and growth can be attributed to the dynamic leadership and vision of leadership in the major players of each sector.
Why is leadership important in economics?
Every organisation operates on fundamental values and a vision for growth. These are set by the organisational leaders. The position occupied by every business organisation in its sector, in the economic framework of the country, is a direct reflection of the ideals and the philosophy of the organisation’s leadership. Let us take the Indian financial sector as an example.
Emerging from the traditional space, the Indian financial sector has chartered an unprecedented growth path by embracing fintech solutions. This has made credit available to the citizens across the far reaches of the country.
This is a direct result of the vision and transformative goals set by a few business leaders and a good example is Sanjiv Bajaj of Bajaj Finserv. This is what makes such leaders some of the most successful entrepreneurs of the country.
What makes a great leader in the new economy?
The one key defining quality that makes for a great leader in the new economy is vision. When the economic scenario of the country was still at its nascent stages, there came a new crop of business leaders who strived to set up manufacturing units and provide services that were hitherto unavailable in the country.
As we continue to grow and develop as a nation, our new generation of visionary leader’s endeavour to take us forward and make India a global hub of manufacturing and services. Setting organisational goals and values that align with such transformation is a key result of efficient leadership. Enabling the transformation and diversification of corporations into allied businesses or even a complete overhaul in the business model is another trait that makes for a successful leader.
Importance of leadership in a global economy
It is important to remember that economies of the different countries of the world no longer function in silos. A change in the NASDAQ or the NYSE reflects in stock markets across the world. We live in an increasingly interconnected economic system.
This makes the role of the organisational leader even more important and leadership economics is the key focus of business studies. Our ability to survive and thrive will depend on the ability of famous financial leaders to gauge the direction of global economic trends and leverage them to the best benefit of their organisations and our nation.
From forming global partnerships to emulating successful international models of business operations, embracing developing technologies, and making use of them to offer new innovative solutions depend on the style and approach of the top company leaders in our country.
An understanding of leadership economics lends us the view that it is essential that a successful leader understands the potential for change and profitability scale of the industry. The ability to lead a company in a new direction is key and such transformational leadership can make all the difference to both market and economic development.
A deeper and clearer understanding of leadership economics helps us focus on the role played by an organisational leader in the growth, success, and profitability of an enterprise and testing the limits of development of the industry.
The ability of the leader to envision transformative changes and implement them is key in ensuring sustainability and growth, both for the business itself and for the larger economy.