Introduction There are so many strands of thought that come to one's mind when we think of charisma. There is a big opinion that leaders who have charisma are infallible. This is far from the truth. In a good article on "Understanding charisma", in the Business magazine, Smart Manager, May-June 2013, Volume 12, Issue 3, pages 66-71, Mr. Morgen Witzel does talk about the downside of every person who has charisma. Hitler and Stalin had tremendous stamina. Yet, they lead their nations to war, in which tens of millions of people died.
More recently we have had the rather unfortunate comparison of Cyrus Mistry, the chief of Tata Sons, to his illustrious predecessor, the great Ratan Tata. He did not live up to the high expectations and was in fact, eased out of his position.
There are some thoughts of Morgen Witzel, that deserve attention. He does point out the benefits of a charismatic leader. According to him, there are three benefits of a charismatic leader. They are a) High levels of recognition among stakeholder groups b) charismatic leaders can be very good at communicating ideals and values and c) charismatic people tend to inspire loyalty.
We will take quotes from the article in total, and then explain the same in terms of very well known examples.
High levels of recognition among stakeholder groups "Richard Branson's personal charisma is an important part of the brand of the Virgin Group and its various businesses. Brandon's reputation for entrepreneurship and "getting things done" have helped to bolster confidence in Virgin businesses among customers and shareholders alike". ( page 89).
Cut to India. Azim Premji of Wipro is still around. Apart from making Wipro one of the globally admired IT corporations, he has also made excellent contributions to the cause of what is now called Corporate Social Responsibility. He is a rare leader from the Indian corporate czars, who have really made CSR work for thousands of poor people, in terms of qualitative contributions to the cause of elementary school children in the two states of Karnataka and Andhra Pradesh. Similarly, charismatic leadership of the late Mr. Deweshwar of ITC has made it a globally competitive FMCG organization. It has entered the biscuit business and has cornered a good market share in the industry. Similarly, it was during Deweshwar's time that the hotels' division went from strength to strength and became a great force to reckon with.
The ability to satisfy shareholders and get their approval and appreciation to do far better things have been noticed in the charismatic leadership of the late Mr. Deweshwar of ITC, Mr. Narayanamurthy of Infosys Technologies, and Mr. V. Krishnamurthy, who lead BHEL, Maruti Udyog and SAIL to the greatest heights.
Mr. V. Krishnamurthy's record was too good as a charismatic leader. His decision to institutionalize the communication process across all workmen on such a regular basis and restore the pride of managers turned around the then sick organization called SAIL. It was he who made the small car revolution in India. India was stuck with two cars -- the Ambassador and the Fiat. Maruti came along and the rest is history. Ditto for another charismatic leader, who actually made his organization go from strength to strength and is now highly respected: Mr. Anand Mahindra. He has made Mahindra&Mahindra, such a superb conglomerate of diverse businesses with such a very good record of success. For instance, Mahindra Finance has done a revolution in rural finance. He is highly respected by his employees and is respected widely for his business acumen.
It should be noted that companies such as BHEL, Maruti, Infosys Technologies, Mahindra and Mahindra, have always been responsive when it comes to rewarding shareholders and they have always respected this vital group of stakeholders.
Charismatic leaders' communicating of ideas and valuesIn the words of Morgen Witzel, " charismatic people make good communicators. They make you want to listen to them and to believe what they say. Provided that what they say is honest and true, this can be a very powerful positive force. Muhammad Yunus, the founder of Grameen, is a person who talks a very consistent values message. Tim Suit of the Eden project in Britain is another. These are individuals who are able to pick up other people and carry them along". (page 69)
The charismatic leaders who have really done so well in this respect are Mr. H.V.Kamath of ICICI bank, Mr. Suresh Krishna of Sundram Fasteners, Mr. Ajay Kotak of the Kotak Mahindra Group, Mr. Vineet Nayar of HCL, who played a key role in making HCL a global player, among several others. What makes a vital difference is their ability to take their subordinates into confidence and then build a very high level of communicating ideals and values. They do this on a consistent basis and charisma definitely helps in all such cases.
Charismatic people inspire loyalty According to Morgon Witzel, "charismatic people tend to inspire loyalty. People follow them not because they are coerced, but because they want to do so. Companies with charismatic leaders often have low employee turnover and high levels of employee satisfaction and commitment." (page 69). And to add meaning to the aforesaid statement, Morgon Witzel goes on to explain that "charismatic leaders are unique people; they have their own special relationships with the rest of the organization. One of the most talked-about concepts in leadership studies today is 'authenticity'. It is absolutely vital that leaders should be authentic, should be themselves, if they are to earn the trust of others."( page 70).
Loyalty often comes from a firm fixation of the mind that the Management and the charismatic leader really cares for them. At Sundaram Fasteners, loyalty flows from such a fixation. It does in the entire TVS group as well. Of course, charisma does not mean that the leader should look like a cinema hero. movie hero. He may be unassuming and simple. Yet, he would be respected for these values and this will inspire loyalty in a very big way. Leaders at the TVS group are all "authentic" leaders. Integrity and honesty are so common. For example, even today, Sundram Finance leads the entire NBFC organizations in terms of profitability and service. They are very much "authentic". Naturally, mutual trust happens.
Conclusion Certain examples pertaining to the three important points of the learned author have been described above. Charismatic leaders are very essential for business organizations. Once this is recognized and understood by all, they will be able to really appreciate their contribution, even much more than what they would do, under normal circumstances.