“Psychological safety” and why it may have led to Mistry’s exit

psychological_safetyFor those you who haven’t yet heard of psychological safety, here goes…

Google recently published results from their project, known as Project Aristotle, which took several years, and included interviews with hundreds of employees and analysis of data about the people on more than 100 active teams at the company.

“The project was to find a magic formula—the perfect mix of individuals necessary to form a stellar team.”

I can tell you that there isn’t a magical formula but hey this is Google so let’s continue to read 😉

Google’s data-driven approach ended up highlighting that:

  1. The best teams respect one another’s emotions
  2. They are mindful that all members should contribute to the conversation equally.
  3. It has less to do with who is in a team, and more with how a team’s members interact with one another.
  4. Members of productive teams take the effort to understand each other, find a way to relate to each other, and then try to make themselves understood.

“At the heart of Google’s findings, is the concept of ‘psychological safety”

Now clearly this didn’t exist in the relationship between Ratan Tata, Cyrus Mistry & the rest of the board. While a lot is being said about it I have listed the things that I feel may have led to this rather uncomfortable situation for the board and everyone else involved.

  • Hiring failure

For what was touted as a ‘big first’ in terms of hiring from outside the family, it seemed odd right from the beginning. Ratan Tata could have easily hired the best in the world with a lot more credible experience than what Cyrus had, yet he chose him.

In fact, Cyrus was originally on the selection committee but was later persuaded, (against his wishes apparently) to apply for the top job.

So what actually happened was that while it appeared that someone from the outside was chosen, was it purely because Ratan Tata felt he could control Cyrus?

  • Breach of Trust

Cyrus was told that he would be given a free hand at the beginning. Once he joined changes were made to what was originally promised.

  • Emotions vs profits

Ratan Tata was obviously emotional about Nano cars, even though it wasn’t doing well. It was probably among his favourite projects and why not. Sometimes we listen to our hearts and not our heads. Shouldn’t Cyrus have figured that out and with equal passion worked on turning things around?

  • Lack of a succession plan

Shouldn’t there have been one? Don’t we all talk about it all the time? Someone who shares the vision, goals, passion and most importantly understands the ethos the Organisation.

  • Poor Communication

The board takes Mistry by surprise, doesn’t offer him an opportunity to explain and unceremoniously sack him. On the other hand I read that Ratan Tata had briefed PM Modi about this in advance. Huh??!! What low levels did their communication or the lack of it stoop to…

So as an outcome of this whole fiasco 2 things happened:

  1. Tata group stocks lost more ground today taking the total market value erosion to over Rs 26,000 crores. To put things in perspective the proposed Bangalore steel flyover is estimated to cost 1,791 crores which can buy the city a fleet of 5000 new buses. Right now there are 6200 of them!
  2. The HR initiatives rolled out across Tata Group – under Cyrus Mistry maybe put on hold till there is clarity.

So finally who suffers, the customers and the employees !

Please drop a line to let me know what you think , I’m curious .