Arun Sarin, CEO of Vodafone outlines the three components of effective leadership

which can build a competitive advantage and he mentioned that ‘In every walk of life,
leaders are crucial to successes’ on 01st June, 2005, source: (http://www.the-
chiefexecutive.com/features/feature451/). According to CEO’s briefing, ‘Effective
leadership has the potential to be a competitive differentiator. Great leaders can take
mediocre institutions and make them great; conversely, poor leaders can weaken the
quality of a great institution’

Over the last 20 years, I have observed great leaders, tried new leadership approaches and
honed my own personal leadership style and philosophy.

I believe there are three interrelated components of leadership: strategic, operational and
human leadership. The careful deployment of these three components can improve the
performance of any organisation.

Leadership matters, whether in business, sports or politics. Effective leadership has the
potential to be a competitive differentiator. Great leaders can take mediocre institutions
and make them great; conversely, poor leaders can weaken the quality of a great
institution.

Over the last 20 years, I have observed great leaders, tried new leadership approaches and
honed my own personal leadership style and philosophy.

I believe there are three interrelated components of leadership: strategic, operational and
human leadership. The careful deployment of these three components can improve the
performance of any organisation.

STRATEGIC LEADERSHIP

In essence, strategic leadership means getting the big picture right: the state of the world,
the state of your industry and the state of your company.

Strategic leadership requires an intimate knowledge of your customers, of your markets,

of the commercial and economic dynamics that are occurring in your marketplaces, and of
the trends that will shape your company and your industry. It is very important to get the
big picture right.

Twenty years ago, Vodafone was a challenger in new markets. In our middle years, we
focused on acquiring a number of companies around the globe to create a world-class
footprint. Today, we face a tougher operating environment for a number of reasons:

• Our markets are maturing; in many markets we have reached 100% penetration
• Competition is accelerating, there are new entrants and there are new business
 models, including low-cost, no-frills ideas borrowed from the airline and
supermarket industries
• We face greater regulatory scrutiny
• We are heading towards a convergence of voice, data, entertainment and
commerce
• Customers' needs and expectations are rising. This means we have to find new
ways to meet these new requirements

To ensure we are going in the right direction, we have developed our vision, values and
goals, which we use as a compass in our everyday work. All businesses, institutions and
organisations should have a broad understanding of their vision, values and goals, to help
them achieve strategic alignment.

VISION, VALUES AND GOALS

The first key element is vision. Vodafone is primarily a mobile wireless communications
company; we do not have any landlines or fixed lines, nor do we intend to have any in the
future.

"All businesses should have a broad understanding of their vision, values and goals."

We are very clear about who we are, what we are focused on and where we want to be.
We do not want to be a fast follower or second in the market; we want to be a world
leader.

Next comes values. Values define the culture of a firm and how it does business. We have
our own statement of values, which we refer to as our four passions – for our customers,
for our employees, for results and for the world around us.

We use these passions to identify the kind of people that we bring into the firm.

When we review candidates, we look for team players, people who are customer-focused,
people who embody our brand and who will go the extra mile to enhance the reputation of
the firm.

In a large organisation in particular, assembling teams of employees with these traits is

essential in ensuring long-term success.

The third element is goals. At Vodafone we have six strategic goals, which reflect what it
is we need to do:

1. Pleasing our customers: we want to be an even more customer-centric company,

anticipating customer needs and providing the best products and services available in the
mobile world.

2. Building the best global team: we are a service business, and we deliver our products
and services through our employees. Our employees are a big part of the success of the
firm. We need to make sure that they are trained and are completely up to speed on what
is going on around them.

3. Leveraging scale and scope: around five years ago, we began collecting a number of
businesses around the world, creating one of the world's largest companies. We now need
to leverage this scale and scope. We need to source the best ideas from around the world,
and to ensure that our customers benefit from these new ideas.

4. Expanding market boundaries: whether it involves moving into Eastern European

markets or diversifying into the entertainment or IT sectors, we are expanding the
boundaries of the company and the telecoms industry as a whole.

5. Providing a superior shareholder return: we know who our shareholders are and
how high their expectations are. Through dividends, share buybacks and good resource
allocation we intend to provide them with excellent rates of return.

6. Being a responsible business: this is not a luxury for us. Our products and services are
part of the fabric of society, and we are obligated to be a responsible business. Our brand
stands for responsibility and we take that responsibility very seriously.

"Values define the culture of a firm and how it does business."

Vodafone's business leaders take every opportunity they get to communicate these goals
and initiatives to its 60,000 employees, and I believe vision, values and goals are the
foundation of our strategic leadership, enabling strategic alignment, improving execution
and ensuring that the organisation always sees the big picture.

OPERATIONAL LEADERSHIP

The second component of leadership is operational leadership. Unless you are performing
as well as you possibly can day in day out, you will give your customers reason to
consider other options.

Operational leadership is therefore about delivering on your goals and measuring and
monitoring the progress of your company. Irrespective of size, the benefits of this level of
discipline and focus are considerable.

To achieve superior operational leadership, everybody in the organisation must share

common goals. Strategic goals must be aligned so that individuals support the goals of
their department, which in turn should support the strategic goals of the company.

This alignment of goals is the basis for regular measuring and monitoring. At Vodafone
progress is measured in relation to our goals as well as our operational and financial
targets. This process continues throughout the organisation right down to individual level.

COMMUNICATION

Communicating goals and progress is another important part of operational leadership.

Because we communicate with our employees regularly, they understand what we are
trying to achieve. This enables me to understand what our front-line employees are going
through and ensures that the decisions we take help them to be more successful in their
jobs.

Another important aspect of operational leadership involves designing an organisational

structure that gets results. At Vodafone we are creating a 'flatter' organisation to help us
serve our customers more effectively.

"Everybody in the organisation must share common goals."

We strive to maintain local connections with customers while at the same time benefiting
from our increased scale and scope.

We empower people with tools and information to ensure that all decisions benefit the
customer and we seek out best practices that have been successful elsewhere and share
them across the organisation.

I believe this kind of approach can be applied to any industry. In essence, operational
leadership is the ability to get things done and achieve company goals.

PEOPLE LEADERSHIP

The third component of effective leadership is people leadership. Leaders must be

exceptional at connecting with people and getting the best from the teams around them.

People leadership means identifying and developing great employees, listening to them,
and recognising and rewarding them. The question that ultimately determines the
effectiveness of your people leadership is 'did you bring out the best in the people around
you?'

At Vodafone we encourage our staff to move across different functions and geographies.
In my own career, I have benefited immeasurably from working in different countries and
performing different functions.

I have served as director of human resources, chief financial officer, general manager,
international chief executive – the list goes on and on. This has prepared me for the role I
have today. We try to use this model in developing aspiring leaders in the business.
People leadership is also about listening to employees. Every two years we ask our
employees to share their views on work and the direction of the company and to offer any
advice they might have for us.

In 2005, close to 90% of our workforce – 50,000 employees – completed the survey. We
were fortunate to see an overall improvement in employee satisfaction, and found that
Vodafone was regarded as an excellent place to work.

Employees said they understood the vision, values and goals of the company, but also
highlighted areas where we could do better. These survey results become the basis for
action plans throughout the organisation.

A CONTINUOUS COMMITMENT

The core concepts of strategic, operational and people leadership are very straightforward,
but there are difficulties in achieving them.

"We have to find new ways to meet customers rising needs and expectations."

One is simultaneous execution, which means you have to practice strategic leadership,
operational leadership and people leadership simultaneously, week after week, month
after month, quarter after quarter, year after year.

Equally, you must have the right people in the right jobs. Otherwise, the challenges of
leadership are very difficult.

As you lead your organisations, ask yourselves how can you use strategic, operational and
people leadership and how can you become better leaders. I believe that seeking answers
to these questions will set you on course to win big in the marketplace.